GlobeNewswire Inc | Nov 11, 2021 08:30AM EST

November 11, 2021

ATLANTA, Nov. 11, 2021 (GLOBE NEWSWIRE) -- Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) (the Company) today announced financial results and provided a business update for the third quarter ended September 30, 2021.

Mark Duff, President and CEO of the Company, commented, We have started to see an improvement in the business following the pandemic-related decline. Specifically, our Treatment Segment revenues have begun to increase, which has continued to build heading into the fourth quarter. Importantly, we hope to capitalize on the pent-up demand as the industry returns to normal. Similarly, our Services Segment was impacted by a hiatus in new contract awards due to the pandemic, as reflected in our third quarter results. However, the government has begun issuing these awards, and were starting to see the positive impact. Im pleased to report we have already won a number of service contracts, adding approximately $50 million of project backlog since the start of the third quarter, which we believe should have a positive impact on our results beginning in the fourth quarter and into 2022. We also secured numerous Indefinite Delivery/Indefinite Quantity (IDIQ) or multi-award task order contracts (MATOCs), which limit competition and provide an opportunity for quick and low-cost proposal development. In addition, we have continued to define and position for new procurement and market expansion opportunities with the US Navy, the US Department of Defense (DOD) and the US Department of Energy (DOE). These opportunities include work scope directly within our core competencies that will support innovative solutions and the potential for increased revenue within both sectors.

We continue to maintain a solid balance sheet, with cash on hand of more than $7.2 million as of September 30, 2021. As a result, we believe that we are capitalized to execute on our business strategy. We feel our recent funding will allow us to accelerate facility upgrades to support potential new revenue streams from Hanford and other government sites that could be a benefit to our Treatment Segment.

COVID-19The Company continues to proactively update its ongoing business operations and safety plans to mitigate any potential impact of COVID-19. However, as the situations surrounding COVID-19 remain fluid, the full impact and extent of the pandemic on the Companys financial results cannot be estimated with any degree of certainty.

Financial ResultsRevenue for the third quarter of 2021 was $15.8 million versus $30.2 million for the same period last year. The decrease was primarily within the Services Segment where revenue decreased to approximately $6.9 million for the three months ended September 30, 2021 from $23.1 million for the corresponding period of 2020 resulting primarily from delays in procurement actions and contract awards from the impact of COVID-19 in the first half of 2021 and the completion of a certain large project within the Services Segment in the second quarter of 2021. However, since the end of the second quarter of 2021, our Services Segment has been awarded a number of new contracts, including a fixed price contract awarded to the Company at the end of the third quarter of 2021 with a value of approximately $40.0 million for the decommissioning of a navy ship. We expect to see a ramp-up of activities from these new projects starting in the fourth quarter of 2021. The Companys Services Segment revenues are project based; as such, the scope, duration and completion of each project vary. As a result, the Services Segment revenues are subject to differences relating to timing and project value. Revenue for the Treatment Segment was approximately $8.9 million and $7.1 million for the third quarter of 2021 and 2020, respectively. Treatment Segment revenue for the third quarter of 2021 included revenue recognized in the amount of approximately $1,286,000 from a request for equitable adjustment (REA) under a certain contract. The Companys revenue within our Treatment Segment for each of the third quarters of 2021 and 2020 continued to be negatively impacted by waste shipment delays from certain key customers primarily due to the impact of COVID-19.

Gross profit for the third quarter of 2021 was $2.2 million versus $4.8 million for the third quarter of 2020. The decrease was entirely within our Services Segment due to lower revenue from fewer projects resulting primarily from delays in contract awards from the impact of COVID-19 and the completion of a certain large project as discussed above.

Operating loss for the third quarter of 2021 was approximately $1.4 million versus operating income of $1.3 million for the third quarter of 2020. Net income attributable to common stockholders for the third quarter of 2021 was approximately $1.4 million or $0.11 per share (both basic and diluted) versus $1.4 million or $0.12 per share (both basic and diluted) for the third quarter of 2020. Net income attributable to common stockholders for the third quarter of 2021 included a tax benefit recorded in the amount of approximately $2.4 million resulting from the release of valuation allowance on the Companys deferred tax assets.

The Company recorded Adjusted EBITDA of ($798,000) from continuing operations during the quarter ended September 30, 2021, as compared to Adjusted EBITDA of $2.0 million for the same period of 2020. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before research and development costs related to the Medical Isotope project and (gain) loss on extinguishment of debt. Both EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of EBITDA and Adjusted EBITDA is relevant and useful by enhancing the readers ability to understand the Companys operating performance. The Companys management utilizes EBITDA and Adjusted EBITDA as a means to measure performance. The Companys measurements of EBITDA and Adjusted EBITDA may not be comparable to similar titled measures reported by other companies. The table below reconciles EBITDA and Adjusted EBITDA, both non-GAAP measures, to GAAP numbers for income from continuing operations for the three and nine months ended September 30, 2021 and 2020.

(Unaudited) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30,(In thousands) 2021 2020 2021 2020 Income from continuing $ 1,381 $ 1,481 $ 3,464 $ 3,049 operations Adjustments: Depreciation & amortization 409 478 1,208 1,189 Interest income (2 ) (28 ) (23 ) (112 )Interest expense 77 87 209 306 Interest expense - financing 11 58 28 187 feesIncome tax benefit (2,836 ) (133 ) (2,840 ) (128 ) EBITDA (960 ) 1,943 2,046 4,491 Research and development costsrelated to Medical Isotope 162 81 311 221 project(Gain) loss on extinguishment ? ? (5,381 ) 27 of debt Adjusted EBITDA $ (798 ) $ 2,024 $ (3,024 ) $ 4,739

The tables below present certain unaudited financial information for the business segments, excluding allocation of corporate expenses:

Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 (Unaudited) (Unaudited)(In Treatment Services Medical Treatment Services Medicalthousands)Net $ 8,893 $ 6,904 $ ? $ 24,094 $ 30,981 $ ? revenuesGrossprofit(negative 2,487 (263 ) ? 4,845 701 ? grossprofit)Segment(loss) 1,316 (984 ) (162 ) 1,682 (1,731 ) (311 )profit

Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 (Unaudited) (Unaudited)(In thousands) Treatment Services Medical Treatment Services MedicalNet revenues $ 7,066 $ 23,106 $ ? $ 24,469 $ 52,610 $ ? Gross profit 1,094 3,656 ? 5,533 7,167 ? Segment profit 450 2,811 (81 ) 2,742 5,160 (221 )(loss)

Conference Call Perma-Fix will host a conference call at 2:00 p.m. ET on Thursday, November 11, 2021. The call will be available in the investors section of the Companys website at https://ir.perma-fix.com/conference-calls, or by calling 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers, and by entering access code: 592717. The conference call will be led by Mark J. Duff, Chief Executive Officer, Dr. Louis F. Centofanti, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Executive Vice President and Chief Financial Officer of Perma-Fix Environmental Services, Inc.

A webcast will also be archived on the Companys website and a telephone replay of the call will be available approximately one hour following the call, through Thursday, November 18, 2021 and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering access code: 43641.

About Perma-Fix Environmental ServicesPerma-Fix Environmental Services, Inc. is a nuclear services company and leading provider of nuclear and mixed waste management services. The Company's nuclear waste services include management and treatment of radioactive and mixed waste for hospitals, research labs and institutions, federal agencies, including the DOE, the DOD, and the commercial nuclear industry. The Companys nuclear services group provides project management, waste management, environmental restoration, decontamination and decommissioning, new build construction, and radiological protection, safety and industrial hygiene capability to our clients. The Company operates four nuclear waste treatment facilities and provides nuclear services at DOE, DOD, and commercial facilities, nationwide.

Please visit us at http://www.perma-fix.com.

This press release contains forward-looking statements which are based largely on the Company's expectations and are subject to various business risks and uncertainties, certain of which are beyond the Company's control. Forward-looking statements generally are identifiable by use of the words such as believe, expects, intends, anticipate, plans to, estimates, projects, and similar expressions. Forward-looking statements include, but are not limited to: results beginning the fourth quarter and into 2022; revenue increase; capitalized to execute business strategy; new projects; capitalize on pent-up demand; backlog impact; revenue within both sectors; and support potential new revenue streams These forward-looking statements are intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. While the Company believes the expectations reflected in this news release are reasonable, it can give no assurance such expectations will prove to be correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this release, including, without limitation, future economic conditions; industry conditions; competitive pressures; our ability to apply and market our new technologies; the government or such other party to a contract granted to us fails to abide by or comply with the contract or to deliver waste as anticipated under the contract; inability to win bid projects; failure of Congress to provides continuing funding for the DODs and DOEs remediation projects; ability to obtain new foreign and domestic remediation contracts; inability to meet financial covenants; impact of COVID-19; and the Risk Factors discussed in, and the additional factors referred to under "Special Note Regarding Forward-Looking Statements" of, our 2020 Form 10-K and Forms 10-Q for quarters ended March 31, 2021, June 30, 2021 and September 30, 2021. 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.

FINANCIAL TABLES FOLLOW

Contacts:David K. Waldman-US Investor RelationsCrescendo Communications, LLC (212) 671-1021

Herbert Strauss-European Investor Relationsherbert@eu-ir.com+43 316 296 316

PERMA-FIX ENVIRONMENTAL SERVICES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

Three Months Ended Nine Months Ended September 30, September 30,(Amounts in Thousands, Except 2021 2020 2021 2020for Per Share Amounts) Net revenues $ 15,797 $ 30,172 $ 55,075 $ 77,079 Cost of goods sold 13,573 25,422 49,529 64,379 Gross profit 2,224 4,750 5,546 12,700 Selling, general and 3,348 3,308 9,550 8,935 administrative expensesResearch and development 243 157 538 598 Loss on disposal of property 1 ? 1 27 and equipment(Loss) income from operations (1,368 ) 1,285 (4,543 ) 3,140 Other income (expense): Interest income 2 28 23 112 Interest expense (77 ) (87 ) (209 ) (306 )Interest expense-financing (11 ) (58 ) (28 ) (187 )feesOther (1 ) 180 ? 189 Gain (loss) on debt ? ? 5,381 (27 )extinguishment of debt(Loss) income from continuing (1,455 ) 1,348 624 2,921 operations before taxesIncome tax benefit (2,836 ) (133 ) (2,840 ) (128 )Income from continuing 1,381 1,481 3,464 3,049 operations, net of taxes Loss from discontinued (43 ) (67 ) (285 ) (266 )operations, net of taxesNet income 1,338 1,414 3,179 2,783 Net loss attributable to (64 ) (32 ) (123 ) (87 )non-controlling interest Net income attributable toPerma-Fix Environmental $ 1,402 $ 1,446 $ 3,302 $ 2,870 Services, Inc. commonstockholders Net income (loss) per commonshare attributable toPerma-Fix Environmental Services, Inc. stockholders -basic:Continuing operations $ .12 $ .13 $ .29 $ .26 Discontinued operations (.01 ) (.01 ) (.02 ) (.02 )Net income per common share $ .11 $ .12 $ .27 $ .24 Net income (loss) per commonshare attributable toPerma-Fix Environmental Services, Inc. stockholders -diluted:Continuing operations $ .12 $ .13 $ .29 $ .25 Discontinued operations (.01 ) (.01 ) (.02 ) (.02 )Net income per common share $ .11 $ .12 $ .27 $ .23 Number of common shares usedin computing net income (loss) per share:Basic 12,198 12,145 12,181 12,134 Diluted 12,406 12,371 12,416 12,337

PERMA-FIX ENVIRONMENTAL SERVICES, INC.CONSOLIDATED BALANCE SHEET

September December 30, 31, 2021 2020 (Amounts in Thousands, Except for Share and Per (Unaudited) (Audited)Share Amounts) ASSETS Current assets: Cash $ 7,222 $ 7,924 Account receivable, net of allowance for doubtful 11,816 9,659 accounts of $60 and $404, respectivelyUnbilled receivables 5,696 14,453 Other current assets 4,675 4,577 Assets of discontinued operations included in 18 22 current assetsTotal current assets 29,427 36,635 Net property and equipment 18,363 17,783 Property and equipment of discontinued operations 81 81 Operating lease right-of-use assets 2,570 2,287 Intangibles and other assets 24,963 22,133 Total assets $ 75,404 $ 78,919 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 21,948 $ 32,065 Current liabilities related to discontinued 332 898 operationsTotal current liabilities 22,280 32,963 Long-term liabilities 11,264 13,253 Long-term liabilities related to discontinued 802 252 operationsTotal liabilities 34,346 46,468 Commitments and Contingencies Stockholders' equity: Preferred Stock, $.001 par value; 2,000,000 shares ? ? authorized, no shares issued and outstandingCommon Stock, $.001 par value; 30,000,000 sharesauthorized, 12,304,265 and 12,161,539 shares 12 12 issued, respectively; 12,296,623 and 12,153,897shares outstanding, respectivelyAdditional paid-in capital 109,954 108,931 Common Stock subscriptions 4,387 ? Accumulated deficit (71,153 ) (74,455 )Accumulated other comprehensive loss (189 ) (207 )Less Common Stock held in treasury, at cost: 7,642 (88 ) (88 )sharesTotal Perma-Fix Environmental Services, Inc. 42,923 34,193 stockholders' equityNon-controlling interest in subsidiary (1,865 ) (1,742 )Total stockholders' equity 41,058 32,451 Total liabilities and stockholders' equity $ 75,404 $ 78,919