PESI - Earnings call transcript Q1 2018 | Perma-Fix Environmental Services, Inc.

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Operator

Greetings, everyone, and welcome to the Perma-Fix Environmental First Quarter 2018 and Business Update Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Waldman with Crescendo Communications. Please go ahead.

David Waldman

Thank you. welcome Environmental and conference first everyone, call. morning, to Services Perma-Fix quarter Good

with company, any are XXXX after company's remind Crescendo Private Initiatives; have please statements the filings with statements this statements or Commission any uncertainties detailed the and press call the hereof Dr. the contained any Securities of morning to on forward-looking U.S. makes bear disclose the the company are us would fact call information questions conference financial These other non-GAAP this On forward-looking date call revisions of statements. call I'd after the cause in that statements. everyone and release to be on factors, certain press well known morning no which Securities to which differ subject the Chief Officer. Executive forward-looking than facts, other and conference and may XXXX this company are or are and any statements is to contact Exchange President from issued like as unknown could materially The posted and a at measures. Naccarato, like additional the first uncertainties Louis include Vice the Litigation performance XXX-XXXX. the results company's certain you risks (XXX) upon within risks Reform as such Mark release. morning's this and commitment forward-looking historical Communications results, circumstances of of statements All to website. this actual events meaning statements of company Ben Strategic that quarter Do within and containing Financial deemed The financial about Centofanti, or CEO; Duff, also that Act also

most of the our GAAP In its believes to Mark. and measures non-GAAP measurement available on such to reconciliation today's comparison performance. turn provides is consistent of and historical release references on I'd Perma-Fix today's ahead, to measures. website. the like that Please over directly to will news - non-GAAP an go A discussion Duff. include addition, call comparable now information additional Mark on our measures the

Mark Duff

we also though happy of income over report gross balance for heading only increased by positive the visibility And of EBITDA $X.X end to second Even QX XXXX. David. while relatively was provides which points reflects backlog the quarter and up the million Thanks, the achieved broadening was into of profit XX.X%. quarter. our This increased and first of flat margins I'm base XXXX, of good to not our revenue to positive our market us streamline but the XXX first to the basis success operations, quarter quarter, gross year. million $X.X for versus the the efforts at

to First, encouraged growth as waste installation disposition. and in half of up getting nuclear Vitrification the clients reason, within spend amongst But facility some our our due $XXX also installed activities, also in from seen being the to our - making primary beginning at an and need treatment of defense waste Perma-Fix in QX and and Atlanta treatings expenses construction, to the as Energy, GeoMelt accept Significant a provides a projects, and enacted the the $X.X radioactive recent is and progress budgets waste translate projects, waste increases money containment include insulation completion quarter remediation this for commercial will XXXX. will will to geographically continuing in earned value to budget to pickup and that area and that services management to its waste by as with processing treat This Metro partnership funding the waste providing of opportunities of late treat high-fixed of spending has stream provide waste. in through such implement Perma-Fix normally provide nonlabor Also the used disposition. system waste facility that waste has a improved solutions. markets budget to otherwise in the million client. as which past are The waste growth will that macro capability the plan perspective, testing, enacted for activities contract Treatment we're We've Veolia of Vitrification environmental system above is which billion expansion Upon no This our removal the Northwest to opportunities recently treat nonbulk DOE's quarter remain well represented budgets our fourth increase with Department activities. for sodium clients at we DOE treatment well. programs, secure with increased realize element this our as starts is residual incremental can an optimistic to wins within environmental ensure be million XXXX the drums XXXX. GMO within sodium water latter containing house's the Gainesville the nuclear construction capacity $X.X on important household treatment our for and additional third management. segment, increase We're are

exist technologies. Just we attractive our will for treatment such like government $X Veolia market waste facilities inventories million sodium, as new at provide here we deploy to reactive permitted exceed an based existing various niche for Perma-Fix The to partnership about annually with market to facilities. that estimate know leverage the on

anticipated of outside U.S. in very in our through Canada, our should international seeing are streams treated in in waste Northwest the a awards contribute our shipping new as origin. stable to that treat. with should to to that will U.S.-based number currently the return quarter. in fourth We're continue growth. Once Especially with of we farm begin we and the U.K., on well waste quarter a the and for disposal opportunities facility Mexico along form difficult Kingdom, the facilities, waste are the We in Italy, second look bidding United countries which initiatives

and Segment is the Segment, result increase It's get especially on to back Within being team an including an to number trajectory, while we're the fuel new XX with may on this long-term and right bids, taken proposal in active a focus in a remain Services quarter that summer. Services track, I continues project confident submittals, of projects But our and management projects including win for which this well the the delayed. our highlighting we're rheological markets remediation increasing are in NORM in the They growing continued waste, allowed Virginia. that management have to A us as occurring unique gas known as as rates. capabilities on growth Pennsylvania, West natural areas opportunities Ohio and in also Canada, oil waste. our material services Western of rheological few acquire demand the new for

our we completing region clients to with partnerships within expand services markets, are to NORM new and service more firms several the Within the overall.

We sustain have stability awards, winning - the to to several Services Segment next need over and revenue important provide growth. and should few to still which in the underway are we revenue our quarters in procurements contribute and provided

innovating the firms the Washington these a few schedules, which the the our final aligning solutions waste on facilities We are teams are into the large on project to Hanford, quarters. Perma-Fix and proposals. me baseline in procurement management value the the contracts entering we costs. savings touch the through and one well, in Oak cost that to medical with in let facilities defined translate heavily briefly within at next note, of companies providing their larger Department fixed the directly budgets unique as operating support as where continue offers to strategic processes Energy Tennessee focused Ridge within subsidiary On trim

also to we'll which the the time through Europe allows regulatory lack total where This last advances This Initially, small in we down committed running in year. regulatory equipped proof we appropriate cost work Canada working much on lower. capital substantially a indicated were if us with partners breakdown concept activities quarter raise a processes to the to to but the markets where of can of to us with they've hurdles that medical - they in our expenditures level. to much interest elsewhere, costs subsidiary focus say regulatory we host a us the and versus - provide to product our a incurred, strategy shifted suffice on to that that and the initiated generators expenses closely development the other market. to of minimal without In same specific need focus test, at is enthusiasm, in and - show give development and develop term bodies. have the we're subsidiary. any will level, fund allow Not allude fact, in the confidence that can't partnering are are in our our closely advance international new developing strategy better the We rather were partners Italy respective and for process. a but for strategy, Perma-Fix subsidiary at willingness capital cost and of they're We're with their

on Another our own, that approval streamline markets, of will accumulate help these hit on can - certain negotiate much additional terms. on path these that can we the we'll is U.S. advantage us data pursue the we to in our better or either milestones, partnership a U.S. regulatory this the market pathway the markets advance we Once and within technology own,

So the quite on we could We're can to be in when see wrap our up, potentially we've are business - expenses, improving. they received backlog, trimmed seeing strong transform horizon that materialize. and waste in financials our and improvements significant that opportunities

who and growth Given overhead potential will will it Ben has our On Ben? significantly to further our to over that turn discuss in we detail. more I'll reduced note, the enhance profitability. the revenue scalable results believe financial operations,

Ben Naccarato

gross XXXX the year you, net and see from our overall flow quarter, with did profit, flat cash operations. improvements in we first Mark. our gross over We income but in Thank began the margin, our revenue relatively prior

million Our the first with total operations was year. revenue consistent from million $XX.X last $XX.X quarter continuing for

by decrease Segment our of our revenue of was in year in million. Segment million facility, $X XX%. revenue to reduction was the recognized Treatment Segment closure or $X.X but $X.X which the due a prior Services Our primarily XX%, M&EC by increased The this or of million in offset Treatment

million. The to assets improvement as written made sales a the facility off our cost depreciation in approximately our the - XXXX, of down Our up accounting in reduction quarter reduction of our most M&EC of third for $X.X expense from of cost this $XX $XXX,XXX. as at most million, the prior as was year of of which were down was

to this $XXX,XXX of increase year or Our increased XX%. million XXXX quarter $X.X gross profit in quarter, in from $X.X an QX first the for million of the

gross profit gross to Our by the profit Services revenue, Segment $XX,XXX. our which Segment improved $XXX,XXX, due was was Treatment increased and up

the Our gross in $X.XX income a of applicable to operations profit, spending, the research quarter quarter compared on we from along this $X.XX. per of was as And of million, for our last SG&A from the compared a $XXX,XXX earnings of loss million lower and spending debt. to had per segment lower interest to an loss result from with share increase in our common which administrative last in we of of with costs. loss shareholders last reductions We compared year, primarily had payroll-related also had our $X.X a our improvement Medical Along $XXX,XXX year diminishing $XXX,XXX. down our year's continuing was saw to $X.X net $XXX,XXX. year, - our increase last share We of $XXX,XXX of income for

operations Our defined release, to we from adjusted the compared for quarter, press last $XXX,XXX this in continuing $XXX,XXX morning's year. as EBITDA was

at sheet. year-end, DSO, the reflecting had annual our to receivables. the million balance XX/XX, in to reflected million, was our cash XX days days. improved fell first from $X.X $X.X receivables, end Compared collections which balance balance million - at to up down quarter in improvement Turning from of a $X.X was our which XX our which of our our We reduction our

our comparatively, end from million. $XXX,XXX, at unearned slightly $X.X of XXXX up at waste quarter, of end backlog with of increased our $X.X $X.X increasing was Our approximately million backlog this million, of the first quarter the and revenue

of Our to current balance M&EC facility net related end million $XXX,XXX, closure the $X.X closure the having at spending representing on of was approval our the down quarter. and a

Our our facility was at end quarter PNC due at total to million, of the debt credit Bank. $X.X the

in flow I'll cash first our activity Finally, quarter. summarize the

from provided cash $X.X million. operations continuing Our was

used cash Our was operations discontinued by $XXX,XXX.

to I'll in continuing call investing our And used monthly now $XXX,XXX cash used which operator, for cap questions. $XXX,XXX, the Our turn which of loan. financing was spending. for cash $XXX,XXX, term our represents that, operations was payments over was With our on

Operator

Instructions] [Operator question. first your line proceed with Our Please MTB question comes of Tristan Barr the with from Asset.

Tristan Barr

the that there I Perma-Fix. website assume Hey, I government-tracking of indicate a test that of TBI new the is can awards that on these assume noticed Phase tank were two guys. we II underway?

Mark Duff

project Yes, going us project progressing, at have phase. which Tristan, Unfortunately, at are to liberty next - is to are forward Tristan. been move provide to those indeed we phase this awarded, than with to is the The that's any next details of not other where the - and the progressing. point regards is allowing

Operator

Our next question line the be coming of Heartland with Nasgovitz from will Bill Funds.

Bill Nasgovitz

Canada? in about be - opportunities guys. that you sales doing Canada, in of little can you What - Hi, Could bit do good Mark, international. you of we'll a level And morning, us enlighten bit outside for mentioned more are what of a estimate terms talk little you example?

Mark Duff

side probably Chalk of facility, Canada. and our pretty a new the in We'll up Canada, Bill, largely open is the weighted We're house. outside well. office on - that's increasing Yes, services of more staffing growing River

slower, We I mentioned, mean, lot as receiving waste a in a It other to the have in second areas as as little like is I Canada. quarter. continue area are in of we Port to the there, well Hope some see opportunities bidding

the to but As is million of far go, a larger the on between the just a down million time. down over it working and for the large. And a two get Italy, still quite $XX some projects time long because other companies we've select get one then is through long to years, procurement projects been very, down as do $XX it most the they And a And the takes what of to large projects. slow time project and Italy very quite in number that are overall takes processed. to and procurements are process one, they to there's particularly

we're the the Italian abating just of So announcement project by large December.

of as to speculating We expect see have will be also U.K. we're see waste that we quarters. that to another year, large this the two Italy quite we on out waste stream value as some in well expect the in next and

Bill Nasgovitz

been And is we something have the before, new? that in never U.K.

Mark Duff

up projects actually and done an and for office Newcastle received But we've staff, over back U.K. years. waste; as a lot there small it we'll we've waste in has the have the then there in and gotten with in at the No, service been We a the contracts area, past said, over the have like over for them Northwest ship had treat we've I with contracts there. some residues time disposal over of long

don't So here. they we have treatment that in capabilities have the Europe robust

to for got of quantity. you've capability it the being smaller little you back lot clients and in high through the can to once us in ship or a very our in and able treated it able So provides U.K. to Europe, on. here when ship that, it a But licensing to much transportation a value Unfortunately, be all get import value expensive. it's costs be

Bill Nasgovitz

then. to Again, just back turning Canada

of anticipate in area will running you that sales do year? this what level be So

Mark Duff

the and jobs building expertise once trust, technical capacity in to the right year time a million us relationships in a put annualize, larger Yes. it to in be staff win couple scheme then the every $XX in What the And doubling overall small, million having and next and the of around then and it is by This will win in we range. really month. And $X you adding is a to probably things. $X it you're we're position larger a anticipate Bill, very seems does this year. and position it start projects million of and

very we money of Canada They have they dollars given a at River aside, Hope really at kind behind large XX where well and it's projects, Port - is is arguably progress, anticipate see set cycle, their making remediation - process. U.S. that in both We aside slow moving, cleanup in that funded, XX, is are they're which us. set Chalk So years the significant for and strategic they're for

Bill Nasgovitz

year lastly, today number. backlog is I What a And missed versus ago? backlog the the

Ben Naccarato

a XX year ago. today, XX

Operator

from Our the question of next comes [Joe Brown]. line

Unidentified Analyst

Congratulations profit? had - on a net was time that when When curious the was Do net profit. your company your you remember I last profitability, historically? the

Ben Naccarato

certainly yes. to last probably for quarter, it fourth while Prior X was quarters So of that XXXX. quarters, XXXX a - the last we're fourth profit was last profitable. fourth yes, reasons. of quarter been have quarter couple - two The The

Unidentified Analyst

that sounded you wanted something like have it I you, said about And million Okay. $X like that? to in ask Is cash. you it

Ben Naccarato

quarter yes. the million, closed $X.X we Yes, at

Unidentified Analyst

were assume wondering and second you're assume fact I'm again, I'd it cash. what given up debt? what you would quarter. profitable, still debt profitable I sorry, are. now your to this And up. so you just rates that your the - that this be doing I quarter And last priorities sounds Would What be building I'm priorities - backlogs are your And but going I'm you some that are. off like isn't that? going with curious quarter, year you're interest Okay. much the just mean, your pay

to As spend your cash, just want you Or hang your would how on to you you accumulate what terms in priorities cash? of it? are

Ben Naccarato

current on that's the at closure have on with M&EC the And Well, books. that liability have closure why liability short-term, the plant. a we the comes we rather the large

So After would a we do low cash. short got in the debt. what manageable term, with we've that, pretty that's the and

that high off. think don't necessarily I pay there's priority So a to

revenue-generating - projects priority. So the would capital or reinvesting investing in be probably

Unidentified Analyst

Or Canada? which projects - think ones get or do And expanding it would it priorities? be far get as as of projects? reinvestment the spending capital priorities in would would there you be which Would those

Mark Duff

of projects we the recall the facilities. from telecon, construction ongoing at quarter talked about are you each may our Joe, last

Unidentified Analyst

right. That's

Mark Duff

to as will several looking well. the as Oak couple we facility, for technologies that Yes, have construction there mind will new treatment our as be your expand or Ridge which in to our facility answer deploy a least technologies also question to at at expand capacity well of additional Northwest the we

fund we facilities of both of that those would with So projects have backlog cash. additional

Operator

Our next question from coming Bill is Heartland of of Nasgovitz the line Funds.

Bill Nasgovitz

terms opportunity, outside profitability about excited are you tank of most Mark, potential and the in growth for of Perma-Fix? Yes, what

Mark Duff

DOE the of I exciting say seeing we're have the of I the contracts. to question, opportunities most rebate the appreciate that are on Bill. large probably some

periods. a And great facilities quarters think well done the larger as know, that if we in team significant as last large Perma-Fix dollars bridge a I has value a of our bids, issues identifying kind technical within at procurements strategically procurement as occurring benefit after these Hanford. you offer the can site in business in those that X-year, how fixed job are the located of commercial few over billions of, facilities the in going the where waste They solving have are treatment are very in opportunities. these

out. to far roles like quarters in with I look or us. market scopes on very see very over of movers so very, that, those important for really TBI provide next aligned strategically as the us I So that working the think, being the of thing teams couple think And able are behind coming I next big

Operator

closing time, Duff remarks. back will At to turn floor this for I the Mark

Mark Duff

thank participating in Great, everyone like thank you. quarter our first I'd call. conference for to

As backlog to grow I earlier, waste the Segment. mentioned within receipts Treatment continues up,

treatment in with of facilities at XXX profit margin M&EC closure $XXX,XXX increase to from increase and We than an in and points. reduced initiatives achieved gross both generated treatment more recent EBITDA at resulted our the basis improvement of adjusted again, gross an diversification waste of forward coupled the in Our efficiency costs income facility excited including federal at streams. And to you facilities quarter. and about very continue new and the to budgets our net you, opportunities expansion of look updating Thank we're attributable next common much. We improved positive our shareholders. prospects import,

Operator

concludes today's conference. This

for You your may your time. you disconnect lines at Thank this participation.

Perma-Fix Environmental Services (PESI) 11 May 182018 Q1 Earnings call transcript