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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
_______________________
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _________
Commission File No. 1-11596
______________
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 58-1954497
(State or other jurisdiction (IRS Employer
of incorporation or organization Identification Number)
1940 N.W. 67th Place, Gainesville, FL 32653
(Address of principal executive offices) (Zip Code)
(352) 373-4200
(Registrant's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
______ ______
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the close of the latest
practical date.
Class Outstanding at May 9, 1997
_____ ________________________________
Common Stock, $.001 Par Value 10,095,948
_____________________________ __________
(excluding 920,000 shares
held as treasury stock)
___________________
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PERMA-FIX ENVIRONMENTAL SERVICES, INC.
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1997 and
December 31, 1995 . . . . . . . . . 2
Consolidated Statements of
Operations - Three Months
Ended March 31, 1997 and 1996 . . . 4
Consolidated Statements of Cash
Flows - Three Months Ended
March 31, 1997 and 1996 . . . . . . 5
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . 18
Item 6. Exhibits. . . . . . . . . . . . . . . . . 18
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
PART I, ITEM 1
The consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes the
disclosures which are made are adequate to make the information
presented not misleading. Further, the consolidated financial
statements reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to
present fairly the financial position and results of operations as
of and for the periods indicated.
It is suggested that these consolidated financial statements
be read in conjunction with the consolidated financial statements
and the notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
The results of operations for the three months ended March 31,
1997 are not necessarily indicative of results to be expected for
the fiscal year ending December 31, 1997.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
March 31,
(Amounts in Thousands, 1997 December 31,
Except for Share Amounts) (Unaudited) 1996
___________________________________________________________________
ASSETS
Current assets:
Cash and cash equivalents $ 79 $ 45
Restricted cash equivalents
and investments 471 448
Accounts receivable, net of
allowance for doubtful accounts
of $373 and $383, respectively 5,372 5,549
Inventories 109 107
Prepaid expense 1,249 549
Other receivables 526 545
_________ ________
Total current assets 7,806 7,243
Property and equipment:
Building and land 5,041 4,894
Equipment 6,317 6,429
Vehicles 1,253 1,421
Leasehold improvements 289 289
Office furniture and equipment 1,144 1,136
Construction in progress 3,258 3,028
_________ ________
17,302 17,197
Less accumulated depreciation (4,893) (4,593)
_________ ________
Net property and equipment 12,409 12,604
Intangibles and other assets:
Permits, net of accumulated
amortization of $655 and $598,
respectively 3,905 3,949
Goodwill, net of accumulated
amortization of $471 and $435,
respectively 4,810 4,846
Covenant not to compete, net of
accumulated amortization of
$391 and $383, respectively - 9
Other assets 390 385
________ ________
Total assets $ 29,320 $ 29,036
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS, CONTINUED
March 31,
(Amounts in Thousands, 1997 December 31,
Except for Share Amounts) (Unaudited) 1996
___________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,785 $ 3,677
Accrued expenses 3,322 2,860
Revolving loan and term note
facility (see Note 2) 4,503 500
Equipment financing agreement 657 646
Current portion of long-term debt 324 333
_________ _______
Total current liabilities 12,591 8,016
Long-term debt, less current portion 950 4,881
Environmental accruals 2,451 2,460
Accrued closure costs 1,107 1,094
_________ _______
Total long-term liabilities 4,508 8,435
Commitments and contingencies (Note 3) - -
Stockholders' equity:
Preferred stock, $.001 par value;
2,000,000 shares authorized,
5,500 shares issued and
outstanding - -
Common stock, $.001 par value;
50,000,000 shares authorized,
11,015,948 and 10,399,947
shares issued and outstanding,
respectively, including 920,000
shares held as treasury stock 11 10
Redeemable warrants 140 140
Additional paid-in capital 29,127 28,495
Accumulated deficit (15,287) (14,290)
________ _______
13,991 14,355
Less common stock in treasury at
at cost; 920,000 shares issued
and outstanding (1,770) (1,770)
________ ________
Total stockholders' equity 12,221 12,585
________ ________
Total liabilities and
stockholders' equity $ 29,320 $ 29,036
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
(Amounts in Thousands, __________________________
Except for Share Amounts) 1997 1996
___________________________________________________________________
Net revenues $ 6,502 $ 7,572
Cost of goods sold 5,164 5,764
________ ________
Gross profit 1,338 1,808
Selling, general and administrative
expenses 1,525 1,742
Depreciation and amortization 544 619
________ ________
Loss from operations (731) (553)
Other income (expense):
Interest income 11 20
Interest expense (183) (262)
Other (13) 203
________ ________
Net loss $ (916) $ (592)
Preferred stock dividends 81 -
________ _________
Net loss applicable to
common stock $ (997) $ (592)
======== =========
Net loss per common share $ (.10) $ (.08)
======== ========
Weighted average number of common
and common equivalent shares
outstanding 9,719 7,872
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
__________________________
(Amounts in Thousands) 1997 1996
___________________________________________________________________
Cash flows from operating activities:
Net loss $ (997) $ (592)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation and amortization 544 619
Provision for bad debt and other
reserves 3 12
Gain on sale of plant, property
and equipment (4) (126)
Changes in assets and liabilities:
Accounts receivable 174 (127)
Prepaid expenses, inventories and
other assets 44 194
Accounts payable and accrued
expenses (21) (364)
________ ________
Net cash used in operations (257) (384)
Cash flows from investing activities:
Purchases of property and equipment,
net (245) (536)
Proceeds from disposition of
property and equipment 45 1,196
Change in restricted cash, net (23) (27)
________ _________
Net cash provided by (used in)
investing activities (223) 633
Cash flows from financing activities:
Borrowings (repayments) from revolving
loan and term note facility 241 (877)
Principal repayments on long-term debt (215) (793)
Proceeds from issuance of stock 488 1,307
________ ________
Net cash provided by (used for)
financing activities 514 (363)
Increase (Decrease) in cash and cash
equivalents 34 (114)
Cash and cash equivalents at beginning
of period 45 201
________ ________
Cash and cash equivalents at end
of period $ 79 $ 87
======== ========
________________________________________________________________
Supplemental disclosure:
Interest paid $ 186 $ 263
Income taxes paid - -
Non cash investing and financing
activities:
Insurance financing $ 746 $ 832
Issuance of stock for payment
of dividends 145 -
Long-term debt incurred for
purchase of property and
equipment 48 57
See accompanying notes to consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Reference is made herein to the notes to consolidated
financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
1. Summary of Significant Accounting Policies
The Company's accounting policies are as set forth in the
notes to consolidated financial statements referred to above.
Certain amounts in prior years' consolidated financial
statements have been reclassified to conform to current period
financial statement presentations.
Net loss per share has been presented using the weighted
average number of common shares outstanding. Common stock
equivalents (stock options and warrants) have not been included in
the net loss per share calculations since their effects would be
antidilutive.
2. Long-Term Debt
Long-term debt consists of the following at March 31, 1997 and
December 31, 1996 (in thousands):
March 31, December 31,
1997 1996
_____________ ____________
Long-term debt and notes payable:
Revolving loan and term note
facility $ 4,503 $ 4,262
Equipment financing agreement 1,104 1,257
Various mortgage, promissory
and notes payable 827 841
_________ _________
6,434 6,360
Less current portion:
Revolving loan and term note
facility 4,503 500
Equipment financing agreement 657 646
Various mortgage, promissory
and notes payable 324 333
_________ _________
Long-term debt, less current
portion $ 950 $ 4,881
========= =========
On January 27, 1995, the Company, as parent and guarantor, and
all direct and indirect subsidiaries of the Company, as co-
borrowers and cross-guarantors, entered into a Loan and Security
Agreement ("Agreement") with Heller Financial, Inc. ("Heller").
The Agreement provides for a term loan in the amount of $2,500,000,
which requires principal repayments based on a five-year level
principal amortization over a term of 36 months, with monthly
principal payments of $42,000. Payments commenced on February 28,
1995, with a final balloon payment in the amount of $846,000 due on
January 31, 1998. The Agreement also provides for a revolving loan
facility in the amount of $7,000,000. At any point in time the
aggregate available borrowings under the facility are reduced by
any amounts outstanding under the term loan and are also subject to
the maximum credit availability as determined through a monthly
borrowing base calculation, equal to 80% of eligible accounts
receivable accounts of the Company as defined in the Agreement.
The termination date on the revolving loan facility is also
January 31, 1998. During the first quarter of 1997, Heller
extended to the Company an overformula line in an amount not to
exceed $300,000, for a period ending the earliest of 90 days after
the date of first advance or May 20, 1997.
The Company was in default of the "fixed charge coverage" and
"capital expenditures" financial covenants for the year ending
December 31, 1996. The Company obtained a waiver from Heller for
the year ended December 31, 1996 and reset certain covenants for
1997 under the Sixth Amendment to the Agreement (effective
April 14, 1997). Therefore, $3,762,000 of such loans with Heller
was classified as long-term debt at December 31, 1996, in
compliance with Generally Accepted Accounting Principles. However,
as noted above, the Agreement with Heller has a scheduled
termination date of January 31, 1998. The Company is currently
negotiating with Heller for the renewal of this Agreement and has
discussions with other potential lenders in an effort to obtain
additional credit proposals to replace Heller, although no
assurance can be given that such a renewal or additional credit
proposals will be obtained. Since this scheduled termination date
is less than twelve months from March 31, 1997, the Company has
reclassified as a current liability $4,003,000 outstanding under
the Agreement under Generally Accepted Accounting Principles that
would otherwise be classified as long-term debt.
Pursuant to the Sixth Amendment, the Company is obligated to
raise an additional $700,000 on or before August 15, 1997, of which
$150,000 is to be received by June 15, 1997. Under such amendment,
this additional amount may be in the form of proceeds received
under property and/or business interruption insurance as a result
of the explosion and fire at PFM's facility, insurance proceeds
with regard to the vandalism at the PFL facility, selling of
additional equity securities by the Company, or other proceeds
obtained in a manner approved by Heller. The Company believes that
it will be able to comply with such a requirement.
Pursuant to the initial agreement, the term loan bears interest
at a floating rate equal to the base rate (prime) plus 1 3/4% per
annum The revolving loan bears interest at a floating rate equal
to the base rate (prime) plus 1 1/2% per annum. The loans also
contain certain closing, management and unused line fees payable
throughout the term. In conjunction with the Third and Sixth
Amendments, applicable interest rates were amended, whereby the
term loan was increased to the base rate plus 2 1/4% and the
revolving loan was increased to the base rate plus 2%. Both the
revolving loan and term loan were prime based loans at March 31,
1997, bearing interest at a rate of 10.50% and 10.75%,
respectively.
As of March 31, 1997, the borrowings under the revolving loan
facility total $3,245,000, an increase of $366,000 from the
December 31, 1996 balance of $2,879,000, with borrowing
availability of $728,000. The balance on the term loan totaled
$1,258,000, as compared to $1,383,000 at December 31, 1996. Total
indebtedness under the Heller Agreement as of March 31, 1997 was
$4,503,000, an increase of $241,000 from the December 31, 1996
balance of $4,262,000.
During October 1994, the Company entered into a $1,000,000
equipment financing agreement with Ally Capital Corporation
("Ally"). During 1995, the Company negotiated an increase in the
total lease line and subsequently utilized $1,553,000 of this
credit facility to purchase new capital equipment. The agreement
provides for an initial term of 42 months, which may be extended to
48, and bears interest at a fixed interest rate of 11.3%. In
conjunction with a 1994 acquisition, the Company also assumed
$679,000 of debt obligations with Ally Capital Corporation, which
had terms expiring from September 1997 through August 1998, at a
rate ranging from 10.2% to 13.05%. The Company was in default of
the "fixed charge coverage" and "capital expenditures" financial
covenants for the year ending December 31, 1996. Pursuant to an
amendment to the Lease Agreement dated April 14, 1997, the Company
obtained a waiver from Ally for the year ended December 31, 1996
and reset certain covenants for 1997. The outstanding balance on
these equipment financing agreements at March 31, 1997 is
$1,104,000, as compared to $1,257,000 at December 31, 1996. As a
result of the above discussed waiver and amendment and the
resetting of certain covenants for 1997, $447,000 has been
classified as long-term debt at March 31, 1997, pursuant to
Generally Accepted Accounting Principles.
3. Commitments and Contingencies
Hazardous Waste
In connection with the Company's waste management services, the
Company handles both hazardous and non-hazardous waste which it
transports to its own or other facilities for destruction or
disposal. As a result of disposing of hazardous substances, in the
event any cleanup is required, the Company could be a potentially
responsible party for the costs of the cleanup notwithstanding any
absence of fault on the part of the Company.
Legal
During September 1994, Perma-Fix of Memphis, Inc. ( PFM ),
formerly American Resource Recovery Corporation ("ARR") and a
subsidiary of the Company, was sued by Community First Bank
("Community First") to collect a note in the principal sum of
$341,000 that was allegedly made by ARR to CTC Industrial Services,
Inc. ("CTC") in February 1987 (the "Note"), and which was allegedly
pledged by CTC to Community First in December 1988 to secure
certain loans to CTC. This lawsuit, styled Community First Bank v.
American Resource Recovery Corporation, was instituted on
September 14, 1994, and is pending in the Circuit Court, Shelby
County, Tennessee. The Company was not aware of either the Note or
its pledge to Community First at the time of the Company's
acquisition of PFM in December 1993. The Company intends to
vigorously defend itself in connection therewith. PFM has filed a
third party complaint against Billie Kay Dowdy, who was the sole
shareholder of PFM immediately prior to the acquisition of PFM by
the Company, alleging that Ms. Dowdy is required to defend and
indemnify the Company and PFM from and against this action under
the terms of the agreement relating to the Company's acquisition of
PFM. Ms. Dowdy has stated in her answer to the third party
complaint that if the Note is determined to be an obligation
enforceable against PFM, she would be liable to PFM, assuming no
legal or equitable defenses.
In May 1995, PFM, a subsidiary of the Company, became aware that
the U.S. District Attorney for the Western District of Tennessee
and the Department of Justice were investigating certain prior
activities of W. R. Drum Company, its successor, First Southern
Container Company, and any other facility owned or operated, in
whole or in part, by Johnnie Williams. PFM used W. R. Drum
Company to dispose of certain of its used drums. In May 1995, PFM
received a Grand Jury Subpoena which demanded the production of any
documents in the possession of PFM pertaining to W. R. Drum
Company, First Southern Container Company, or any other facility
owned or operated, and holder in part, by Johnnie Williams. PFM
complied with the Grand Jury Subpoena. Thereafter, in September of
1995, PFM received another Grand Jury Subpoena for documents from
the Grand Jury investigating W. R. Drum Company, First Southern
Container Company and/or Johnnie Williams. PFM complied with the
Grand Jury Subpoena. In December 1995, representatives of the
Department of Justice advised PFM that it was also currently a
subject of the investigation involving W. R. Drum Company, First
Southern Container Company, and/or Johnnie Williams. Since that
time, however, PFM has had no contact with representatives of
either the United States District Attorney's office for the Western
District of Tennessee or the Department of Justice, and is not
aware of why it is also a subject of such investigation. In
accordance with certain provisions of the Agreement and the Plan of
Merger relating to the prior acquisition of PFM, on or about
January 2, 1996, PFM notified Ms. Billie K. Dowdy of the foregoing,
and advised Ms. Dowdy that the Company and PFM would look to Ms.
Dowdy to indemnify, defend and hold the Company and PFM harmless
from any liability, loss, damage or expense incurred or suffered as
a result of, or in connection with, this matter.
On January 27, 1997, an explosion and resulting tank fire
occurred at PFM s facility in Memphis, Tennessee, a hazardous waste
storage, processing and blending facility. The fire and explosion
resulted in damage to certain hazardous storage tanks located on
the facility and caused certain limited contamination at the
facility. The fire and resulting explosion were caused by the
welding activity of employees of an independent contractor at or
near a hazardous waste tank farm located on the facility contrary
to instructions of PFM. From the date of the fire, this facility
has not been operational. It is anticipated that this facility
will begin limited operations during May, 1997. Since the fire and
explosion, PFM has accepted, and will continue to accept, waste for
processing and disposal, but has arranged for other facilities
owned by the Company or subsidiaries of the Company or others not
affiliated with the Company to process such waste. As a result of
the fire and explosion, the Tennessee Department of Environment and
Conservation ( TDEC ) issued an order dated April 23, 1997, which
alleges that the facility violated certain hazardous waste rules
and regulations promulgated by the TDEC and ordered that the
facility, among other things, cease blending operations, within 30
days from the date of the order the facility s permit to construct
a new hazardous waste tank storage area, which has not yet been
constructed, is to be revoked, implement certain actions and
assessed a penalty of approximately $144,000. PFM has responded to
such order and asserted that the TDEC issued the order against the
wrong party, that PFM did not violate any rules and regulations
promulgated by the TDEC, the actions taken by the TDEC were
contrary to applicable rules and regulations and the TDEC is not
entitled to such penalties. The Company intends for PFM to
vigorously defend itself in connection with this matter.
In addition to the above matters and in the normal course of
conducting its business, the Company is involved in various other
litigation. The Company is not a party to any litigation or
governmental proceeding which its management believes could result
in any judgments or fines against it that would have a material
adverse affect on the Company's financial position, liquidity or
results of operations.
Permits
The Company is subject to various regulatory requirements,
including the procurement of requisite licenses and permits at
certain of its facilities. These licenses and permits are subject
to periodic renewal without which the Company's operations would be
adversely affected. The Company anticipates that, once a license
or permit is issued with respect to a facility, the license or
permit will be renewed at the end of its term if the facility's
operations are in compliance with the applicable regulatory
requirements.
Accrued Closure Costs and Environmental Liabilities
The Company maintains closure cost funds to insure the proper
decommissioning of its RCRA facilities upon cessation of
operations. Additionally, in the course of owning and operating
on-site treatment, storage and disposal facilities, the Company is
subject to corrective action proceedings to restore soil and/or
groundwater to its original state. These activities are governed
by federal, state and local regulations and the Company maintains
the appropriate accruals for restoration. The Company has recorded
accrued liabilities for estimated closure costs and identified
environmental remediation costs.
Insurance
The business of the Company exposes it to various risks,
including claims for causing damage to property or injuries to
persons or claims alleging negligence or professional errors or
omissions in the performance of its services, which claims could be
substantial. The Company carries general liability insurance which
provides coverage in the aggregate amount of $2 million and an
additional $6 million excess umbrella policy and carries $1 million
per occurrence and $2 million annual aggregate of errors and
omissions/professional liability insurance coverage, which includes
pollution control coverage.
The Company also carries specific pollution liability insurance
for operations involved in the Waste Management Services segment.
The Company believes that this coverage, combined with its various
other insurance policies, is adequate to insure the Company against
the various types of risks encountered.
4. Stock Issuance
Effective February 7, 1997, the Company amended five (5) warrants
with an original issuance date of February 10, 1992 to purchase an
aggregate of 487,814 shares of the Company's common stock
("Acquisition Warrants"). The Acquisition Warrants were amended to
(i) reduce the exercise price from $2.1475 per share of common
stock to $1.00 per share of common stock, and (ii) extend the
expiration date of the warrants from February 10, 1997 to March 3,
1997. All Acquisition Warrants were subsequently exercised prior
to this March 3, 1997 date, which resulted in the issuance of
487,814 shares of common stock and $488,000 of additional
capital/equity.
5. Facility Disruption
On January 27, 1997, an explosion and resulting tank fire
occurred at the Perma-Fix of Memphis, Inc. ("PFM") facility, a
hazardous waste storage, processing and blending facility, located
in Memphis, Tennessee, which resulted in damage to certain
hazardous waste storage tanks located on the facility and caused
certain limited contamination at the facility. Such occurrence was
caused by welding activity performed by employees of an independent
contractor at or near the facility's hazardous waste tank farm
contrary to instructions by PFM. From the date of the fire, this
facility has not been operational. However, PFM has accepted and
will continue to accept waste for processing and disposal, but has
arranged for other facilities owned by the Company or subsidiaries
of the Company or others not affiliated with the Company to process
such waste. The utilization of other facilities to process such
waste results in higher costs to PFM than if PFM were able to store
and process such waste at its Memphis, Tennessee, TSD facility,
along with the additional handling and transportation costs
associated with these activities. PFM is in the process of
repairing and/or removing the damaged storage tanks and any
contamination resulting from the occurrence, and, as of the date of
this report, anticipates that PFM will be able to begin certain
limited operations at the facility during the month of May, 1997.
The extent of PFM's activities at the facility, once operations are
renewed, is presently being evaluated by the Company.
Net revenues for PFM total $752,000 for the first quarter of
1997, reflecting a decrease of $75,000 from the first quarter of
1996 total of $827,000. However, during this same period, cost of
goods sold increased by $179,000, from a total of $677,000, to
$856,000 for this first quarter of 1997. The result of the above
was a reduction of $254,000 in the PFM gross margin, to a total
loss of $104,000 at the gross margin level for the period. The
Company and PFM have property and business interruption insurance
and have provided notice to its carriers of such loss. Although
there are no assurances, the Company presently believes that its
property insurance will cover any property loss suffered by PFM at
the facility as a result of such occurrence. The Company is in the
process of determining the amount of business interruption
insurance that may be recoverable by PFM as a result thereof, if
any.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART I, ITEM 2
Results of Operations
The table below should be used when reviewing management's
discussion and analysis for the three months ended March 31, 1997
and 1996:
Consolidated
(amounts in thousands) 1997 % 1996 %
______________________ _______ _____ _______ _____
Net Revenues $ 6,502 100.0 $ 7,572 100.0
Cost of Goods Sold 5,164 79.4 5,764 76.1
______ _____ ______ _____
Gross Profit 1,338 20.6 1,808 23.9
Selling, General and
Administrative 1,525 23.5 1,742 23.0
Depreciation/Amortization 544 8.4 619 8.2
______ _____ ______ ______
Loss from operations $ (731) (11.3) $ (553) (7.3)
====== ===== ====== ======
Interest Expense (183) (2.8) (262) (3.5)
Preferred Stock Dividend $ (81) (1.2) $ - -
Summary -- Quarter Ended March 31, 1997 and 1996
The Company provides services through two business segments. The
Waste Management Services segment is engaged in on- and off-site
treatment, storage, disposal and blending of a wide variety of by-
products and industrial and hazardous wastes. This segment
competes for materials and services with numerous regional and
national competitors to provide comprehensive and cost-effective
waste management services to a wide variety of customers in the
Midwest, Southeast and Southwest regions of the country. The
Company operates and maintains facilities and businesses in the
waste by-product brokerage, on-site treatment and stabilization,
and off-site blending, treatment and disposal industries. The
Company's Consulting Engineering segment of the pollution control
industry provides a wide variety of environmental related
consulting and engineering services to industry and government.
Through the Company's wholly-owned subsidiaries in Tulsa, Oklahoma
and St. Louis, Missouri, this segment provides oversight management
of environmental restoration projects, air and soil sampling and
compliance reporting, surface and subsurface water treatment design
for removal of pollutants, and various compliance and training
activities.
Consolidated net revenues decreased to $6,502,000 from $7,572,000
for the quarter ended March 31, 1997, as compared to 1996. This
decrease of $1,070,000 or 14.1% is attributable to the Waste
Management Services segment which experienced a reduction in
revenues of $1,136,000, partially offset by an increase of $66,000
in revenues from the Consulting Engineering segment. This
reduction within the Waste Management Services segment is
indicative of the traditionally slower first quarter, with 1997
further impacted by the following four (4) factors: (i) the
divestiture of the Company s plastic recycling facility in Houston,
Texas, Re-Tech Systems, Inc., effective March 15, 1996 which
contributed $129,000 of revenue during 1996; (ii) the facility
disruption which occurred at the Perma-Fix of Memphis, Inc. ("PFM")
facility located in Memphis, Tennessee, resulting from an explosion
and tank fire on January 27, 1997, which negatively impacted or
reduced first quarter 1997 revenues by approximately $75,000 as
compared to the first quarter of 1996; (iii) the New Mexico field
services group completed, during the first quarter of 1996, a
$274,000 remedial project, with no comparable large projects
completed during the first quarter of 1997; and (iv) limited work
was performed during the first quarter of 1997 at the Department of
Energy (DOE) operation in Fernald, Ohio, due to a delay in starting
the Company s third contract with the DOE. Total Fernald DOE
related revenue for the first quarter of 1997 was $44,000, as
compared to $648,000 during the first quarter of 1996. However,
work on the Fernald mixed waste operation resumed in April, 1997.
As a result of the fire and explosion at PFM's facility on
January 27, 1997, PFM's net revenues totaled $752,000 for the first
quarter of 1997, as compared to $827,000 for the first quarter of
1996.
Costs of goods sold decreased to $5,164,000 from $5,764,000 for
the quarter ended March 31, 1997. The $600,000 or 10.4% decrease
is primarily attributable to the reduced revenue during the first
quarter of 1997, as discussed above. As a percent of revenue,
costs of goods sold increased to 79.4% in the first quarter of
1997, compared to 76.1% in the corresponding first quarter of 1996.
This consolidated increase in cost of goods sold as a percent of
revenue reflects principally the additional operating costs
incurred at the PFM facility resulting from the above-discussed
disruption and associated increased operating, disposal, and
transportation costs as a result of such disruption. Cost of goods
sold for PFM was approximately 81% for the first quarter of 1996,
as compared to 114% for the first quarter of 1997, which equates to
additional costs of approximately $255,000. See other sections of
this Management s Discussion and Analysis of Financial Conditions
and Results of Operations and in Note 5 to Notes to Consolidated
Financial Statements for a discussion of certain insurance that the
Company has as a result of the fire and explosion at the PFM
facility. Also impacting cost of goods sold and gross margin was
the above-discussed delayed start-up of the company s third
contract at the Fernald DOE facility, which included not only the
impact of the fixed costs, but also additional expenses related to
process development and enhancements. The Consulting Engineering
segment also experienced additional costs during the first quarter
of 1997 in preparation for several larger contracts to be worked
during the subsequent periods of 1997. The above-discussed
increases in operating costs were partially offset by improvements
within the remaining Waste Management Services segment facilities,
as the Company continued to emphasize cost containment.
Selling, general and administrative expenses decreased to
$1,525,000 for the first quarter of 1997, from $1,742,000 for the
first quarter of 1996. As a percent of revenue, selling, general
and administrative expenses increased to 23.5% for the quarter
ended March 31, 1997 compared to 23.0% for the same period in 1996.
The selling, general and administrative expense decrease of
$217,000 or 12.5% reflects both a reduction in marketing expenses
($25,000), principally within the Waste Management Services segment
and reductions in administrative overhead within both the Waste
Management Services segment ($128,000) and Consulting Engineering
segment ($62,000). During the first quarter of 1996, the Company
made significant reductions in corporate overhead, which the
Company continues to monitor and control closely, as reflected by
a further reduction of approximately $8,000 during the first
quarter of 1997 as compared to the first quarter of 1996.
Depreciation and amortization expense for the quarter ended
March 31, 1997 reflects a total of $544,000, a decrease of $75,000
from the first quarter 1996 total of $619,000. Amortization
expense reflects a total of $103,000 for the first quarter of 1997,
a reduction of $11,000, which is a direct result of the covenant
not to compete having become fully amortized during this first
quarter of 1997. Depreciation expense also reflected a reduction
of $64,000, principally a result of the divestiture of the
Company s plastic recycling facility in Houston, Texas, Re-Tech
Systems, Inc., which resulted in a $14,000 reduction, the sale of
various other non-performing assets during 1996 in conjunction with
the restructuring process and various other assets becoming fully
depreciated.
Interest expense was $183,000 for the quarter ended March 31,
1997, as compared to $262,000 for the same period of 1996. The
decrease in interest expense of $79,000 reflects the reduced
borrowing levels on the Heller Financial, Inc. revolving loan and
term note, which resulted in a reduction of $34,000 and reduced
overall borrowing of other debt issues related to their scheduled
repayments, which resulted in a reduction of approximately $45,000.
Offsetting this reduced interest expense, during the first quarter
of 1997, was the preferred stock dividend totaling $81,000 incurred
in conjunction with the Series 3 Class C convertible preferred
stock as issued in July 1996.
Other income and expense for the quarter ended March 31, 1997
reflected a net expense total of $13,000, as compared to an income
of $203,000 for the quarter ended March 31, 1996. This 1996 income
total was principally a result of the gain on the sale of certain
nonproductive assets within the Waste Management Services segment.
Facility Disruption
As previously discussed, on January 27, 1997, an explosion and
resulting tank fire occurred at PFM's facility, a hazardous waste
storage, processing and blending facility, located in Memphis,
Tennessee, which resulted in damage to certain hazardous waste
storage tanks located on the facility and causing certain limited
contamination at the facility. From the date of the fire through
the date of this report, this facility has not been operational.
However, PFM has accepted and will continue to accept waste for
processing and disposal, but has arranged for other facilities
owned by the Company or subsidiaries of the Company or others not
affiliated with the Company to process such waste during this
period. The utilization of other facilities to process such waste
results in higher costs to PFM than if PFM were able to store and
process such waste at its Memphis, Tennessee, TSD facility, along
with the additional handling and transportation costs associated
with these activities. As previously discussed, the Company has
experienced a reduction in revenues as a result of this occurrence,
as this facility attempts to selectively accept and reroute waste.
Net revenues for PFM totaled $752,000 for the quarter ended
March 31, 1997, reflecting a decrease of $75,000 from the 1996
first quarter of $827,000. However, during the same period, cost
of goods sold at this facility increased by $179,000 from a total
of $677,000 to $856,000 for the first quarter of 1997. The result
of the above was a reduction of $254,000 in PFM's gross margin and
a loss at PFM of $104,000 for the first quarter of 1997. PFM is in
the process of repairing and/or removing the damaged storage tanks
and any contamination resulting from the occurrence, and, as of the
date of this report, anticipates that PFM will be able to begin
certain limited operations at the facility during the month of May,
1997. The extent of PFM's activities at the facility, once
operations are renewed, are presently being evaluated by the
Company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Liquidity and Capital
Resources" for further information and discussion of certain
forward-looking statements contained herein and certain cautionary
statements relating thereto. See Note 3 to Notes to Consolidated
Financial Statements and "Legal Proceedings" for a discussion as to
certain administrative action brought by the Tennessee Department
of Environment and Conservation relating to the fire and explosion.
Liquidity and Capital Resources of the Company
At March 31, 1997, the Company had cash and cash equivalents of
$79,000. This cash and cash equivalents total reflects an increase
of $34,000 from December 31, 1996, as a result of net cash used in
operations of $257,000, cash used in investing activities of
$223,000 (principally purchases of equipment, net totaling
$245,000, partially offset by the proceeds from the sale of
property and equipment of $45,000) and cash provided by financing
activities of $514,000 (principally from the exercise of
acquisition warrants for $488,000). Accounts receivable, net of
allowances, totaled $5,372,000, a decrease of $177,000 from the
December 31, 1996 balance of $5,549,000, which reflects the reduced
revenue levels during the first quarter, partially offset by an
increase in the days sales outstanding, resulting from the first
quarter (seasonal) timing of collections.
In January 1995, the Company entered into a Loan and Security
Agreement with Heller Financial, Inc. ("Heller"). Under the loan
agreement with Heller, the Company was provided a term loan of
$2,500,000 and a revolving loan facility in the amount of
$7,000,000. The term loan is for a term of 36 months, payable in
monthly installments of $42,000 and a balloon payment for the
balance on January 31, 1998. The revolving loan facility is
reduced by the outstanding unpaid principal amount due on the term
loan and is subject to the maximum credit availability, determined
through a monthly borrowing base equal to 80% of the eligible
accounts receivable (as defined in the loan agreement) of the
Company and its subsidiaries. During the first quarter of 1997,
Heller extended to the Company an overformula line in an amount not
to exceed $300,000, for a period ending the earliest of 90 days
after the date of first advance or May 20, 1997. See Note 2 to
Notes to Consolidated Financial Statements.
The Company was in default of the "fixed charge coverage" and
"capital expenditures" financial covenants for the year ending
December 31, 1996. The Company obtained a waiver from Heller for
the year ended December 31, 1996 and reset certain covenants for
1997 under the Sixth Amendment to the Agreement (effective
April 14, 1997). Therefore, $3,762,000 of such loans with Heller
was classified as long-term debt at December 31, 1996, in
compliance with Generally Accepted Accounting Principles. However,
as noted above, the Loan and Security Agreement with Heller has a
scheduled termination date of January 31, 1998. The Company is
currently negotiating with Heller for the renewal of this Agreement
and has had discussions with other potential lenders in an effort
to replace the term and revolving loans provided to the Company by
Heller. There are no assurances that such a renewal or new credit
facility will be obtained. As a result of this scheduled
termination date and in compliance with Generally Accepted
Accounting Principles, the Company has reclassified as a current
liability $4,003,000 outstanding under the Agreement with Heller
that would otherwise be classified as long-term debt.
As of March 31, 1996, the borrowings under the Company's
revolving loan facility with Heller totaled $3,245,000, an increase
of $366,000 from the December 31, 1996 balance of $2,879,000, with
a related borrowing availability of $728,000, based on 80% of the
amount of eligible receivables of the Company as of March 31, 1997.
The balance on the term loan totaled $1,258,000, as compared to
$1,383,000 at December 31, 1996. Total indebtedness under the
Agreement with Heller, as amended, as of March 31, 1997 was
$4,503,000, an increase of $241,000 from the December 31, 1996,
balance of $4,262,000. See Note 2 to Notes to Consolidated
Financial Statements.
Pursuant to the initial agreement, the term loan bears interest
at a floating rate equal to the base rate (prime) plus 1 3/4% per
annum The revolving loan bears interest at a floating rate equal
to the base rate (prime) plus 1 1/2% per annum. The loans also
contain certain closing, management and unused line fees payable
throughout the term. In conjunction with the Third and Sixth
Amendments, applicable interest rates were amended, whereby the
term loan was increased to the base rate plus 2 1/4% and the
revolving loan was increased to the base rate plus 2%. Both the
revolving loan and term loan were prime based loans at March 31,
1997, bearing interest at a rate of 10.50% and 10.75%,
respectively.
Pursuant to the Sixth Amendment to the Agreement with Heller, the
Company is obligated to raise an additional $700,000 on or before
August 15, 1997, of which $150,000 is to be received by June 15,
1997. Under such amendment, this additional amount may be in the
form of proceeds received under property and/or business
interruption insurance as a result of the explosion and fire at
PFM's facility, insurance proceeds with regard to the vandalism at
the PFL facility, selling of additional equity securities by the
Company, or other proceeds obtained in a manner approved by Heller.
The Company believes that it will be able to comply with such a
requirement. Whether the Company will be able to comply with such
a requirement is a forward-looking statement, and the results of
such could materially differ from the above statement if, among
other things, PFM is unable to recover from its insurance carrier
insurance proceeds and the Company is unable to sell equity
securities in an aggregate amount necessary to comply with such
requirement.
Under the Sixth Amendment to the Agreement with Heller, the
Company was to provide Heller with evidence on or before May 9,
1997, that the adjusted orderly liquidation value of the equipment
owned by the Company and its subsidiaries that are borrowers under
the Agreement with Heller exceeds 75% of the principal amount of
the term loan with Heller, which totaled $1,175,000 as of May 1,
1997. The Company has completed this analysis and provided Heller
documentation whereby the gross orderly liquidation appraised
value, as provided by a third party appraisal company, was
approximately $2,922,000. This appraised value of owned equipment,
when extended by 75%, totals $2,191,000, an excess of $1,016,000
over the current term loan balance.
Ally Capital Corporation ("Ally") had previously provided the
Company with an equipment financing arrangement to finance the
purchase of capital equipment. As of March 31, 1997, the Company's
outstanding principal balance owing under this equipment financing
arrangement was $1,104,000. The Company has fully utilized this
equipment financing arrangement with Ally. See Note 2 to Notes to
Consolidated Financial Statements.
At March 31, 1997, the Company had $6,434,000 in aggregate
principal amounts of outstanding debt, as compared to $6,360,000 at
December 31, 1996. This increase in outstanding debt of $74,000
during the first quarter of 1997 is principally a result of the
borrowings under the Heller revolving loan facility, as previously
discussed. The revolving loan increased during the first quarter
of 1997 by $366,000 and reflects the additional operational needs
during this traditionally slower first quarter.
As of March 31, 1997, total consolidated accounts payable for the
Company was $3,785,000, an increase of $108,000 from the
December 31, 1996 balance of $3,677,000. This increase in accounts
payable reflects the seasonal trend as the Company emerges from its
slower first quarter, and an increase in resulting payables in
conjunction with revenue increases. As a result of this
seasonality, the balance of payables in excess of sixty (60) days
increased from $1,422,000 at December 31, 1996 to $1,734,000 at
March 31, 1997. This March 1997 payable total over sixty (60) days
does, however, reflect a significant improvement over the March 31,
1996, total of $3,108,000 in payables over sixty (60) days.
The Company's net purchases of new capital equipment for the
three month period ended March 31, 1997 totaled approximately
$245,000, excluding financed capital expenditures of $48,000.
These expenditures were for improvements to the operations,
including two (2) capital expansion projects within the Waste
Management Services segment, and other capital expenditures
necessary to maintain compliance with federal, state or local
permit standards. These capital expenditures were principally
funded through the operating cash flow of the Company and
utilization of the Heller revolving loan facility. The Company has
budgeted capital expenditures of $1,250,000 for 1997 (excluding any
expenditures at PFM due to the explosion and fire), which includes
completion of the two (2) above noted expansion projects estimated
to be approximately $300,000, as well as other identified capital
and permit compliance purchases. The Company anticipates funding
these capital expenditures by a combination of lease financing with
lenders other than the equipment financing arrangement discussed
above, and/or internally generated funds. The ability to fund such
capital expenditure is a forward-looking statement and is subject
to certain factors that could cause actual results to differ
materially from such statement, including, but not limited to, the
ability to obtain such financing, revenues materially decrease from
that budgeted for 1997 or the Company is required to use internally
generated funds for purposes not presently anticipated.
The working capital deficit position at March 31, 1997 was
$4,785,000, as compared to a deficit position of $773,000 at
December 31, 1996. The March 1997, deficit position includes the
reclassification of the Heller long-term debt to current, as a
result of Heller s scheduled termination date of January 31, 1998.
In compliance with Generally Accepted Accounting Principles, the
Company has reclassified as a current liability $4,003,000
outstanding under the agreement that would otherwise be classified
as long-term debt. If the Company would not have had to reclassify
$4,003,000 of the debt due to Heller under the Agreement, the March
1997, deficit position would have been $782,000, which reflects a
change of only $9,000 from the December deficit position.
Effective February 7, 1997, the Company amended five (5) warrants
with an original issuance date of February 10, 1992, to purchase an
aggregate of 487,814 shares of the Company's common stock
("Acquisition Warrants"). The Acquisition Warrants were amended to
(i) reduce the exercise price from $2.1475 per share of common
stock to $1.00 per share of common stock, and (ii) extend the
expiration date of the warrants from February 10, 1997 to March 3,
1997. All Acquisition Warrants were subsequently exercised prior
to this March 3, 1997 date, which resulted in $487,814 of
additional capital/equity.
As previously discussed, the Company's subsidiary, PFM, sustained
an explosion and fire at its TSD facility in Memphis, Tennessee, on
January 27, 1997, damaging certain hazardous waste storage tanks
and causing certain limited contamination at the facility. Since
such event the facility has not been operational. It is presently
anticipated that such facility will become operational on a limited
basis during May 1997. PFM is in the process of repairing or
removing the damaged tanks and removing or remediating the
contamination caused by the explosion and fire. During the period
that PFM's facility is not operational, PFM has accepted and will
continue to accept waste for processing and disposal, but has
arranged for other facilities owned by the Company or subsidiaries
of the Company or others not affiliated with the Company to process
such waste. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Facility Disruption." The
Company and PFM have property and business interruption insurance.
The Company presently believes, although there are no assurances,
that its property insurance will reimburse the Company for repair,
replacement or removal of the damaged property, due to the
explosion and fire. The cost of this property repair and
restoration is undetermined at this time. The Company is presently
in the process of determining the amount of business interruption
insurance that may be recoverable by PFM as a result of such
occurrence, if any. The Tennessee Department of Environment and
Conservation ("TDEC") has issued an order as a result of the fire
and explosion alleging that the facility violated certain hazardous
waste rules and regulations and ordering the facility, among other
things, to take certain action and assessing a penalty of
approximately $144,000. PFM has filed a response and intends to
vigorously defend itself in connection therewith. See "Legal
Proceedings." Certain statements contained in this paragraph are
forward-looking statements, and (i) PFM may be unable to begin
operations as stated above if repair, removal or restoration of the
damaged tanks are delayed beyond the date stated or any federal,
state or local authority prohibits PFM from beginning operations or
delays issuance of the approvals, if any, necessary for PFM to
begin operations, or (ii) the insurance carrier determines that
property loss coverage is not available or is available only in
limited amounts or contests the amount of PFM s claim.
In summary, the Company has taken a number of steps to improve
its operations and liquidity as discussed above, which during the
first quarter was negatively impacted by the disruption from the
PFM explosion and fire. If the Company is unable to continue to
improve its operations and to become profitable in the foreseeable
future, such would have a material adverse effect on the Company's
liquidity position and on the Company. This is a forward-looking
statement and is subject to certain factors that could cause actual
results to differ materially from those in the forward-looking
statement, including, but not limited to, the Company's ability to
become profitable or, if the Company is not able to become
profitable, whether the Company is able to raise additional
liquidity in the form of additional equity or debt.
Environmental Contingencies
The Company is engaged in the waste management services segment
of the pollution control industry. As a participant in the on-site
treatment, storage and disposal market and the off-site treatment
and services market, the Company is subject to rigorous federal,
state and local regulations. These regulations mandate strict
compliance and therefore are a cost and concern to the Company.
Because of the integral part of providing quality environmental
services, the Company makes every reasonable attempt to maintain
complete compliance with these regulations; however, even with a
diligent commitment, the Company, as with many of its competitors,
may be required to pay fines for violations or investigate and
potentially remediate its waste management facilities. See Note 3
to Notes to Consolidated Financial Statements and "Legal
Proceedings."
The Company routinely uses third party disposal companies, who
ultimately destroy or secure landfill residual materials generated
at its facilities or at a client's site. The Company, compared to
its competitors, disposes of significantly less hazardous or
industrial by-products from its operations due to rendering
material non-hazardous, discharging treated waste waters to
publicly-owned treatment works and/or recycling wastes into
saleable products. In the past, numerous third party disposal
sites have improperly managed wastes and consequently require
remedial action; consequently, any party utilizing these sites may
be liable for some or all of the remedial costs. Despite the
Company's aggressive compliance and auditing procedures for
disposal of wastes, the Company could, in the future, be notified
that it is a PRP at a remedial action site, which could have a
material adverse effect on the Company.
In addition to budgeted capital expenditures of $1,250,000 for
1997 at the TSD facilities, which are necessary to maintain permit
compliance and improve operations, as discussed above, the Company
has also budgeted for 1997 an additional $350,000 in environmental
expenditures to comply with federal, state and local regulations in
connection with remediation of certain contaminates at two
locations. The two locations where these expenditures will be made
are at a certain leased property in Dayton, Ohio, a former RCRA
storage facility operated by the former owners of PFD and leased by
a predecessor of PFD, and PFM's facility in Memphis, Tennessee
(excluding any capital expenditures due to the previously discussed
fire and explosion at PFM). Additional funds will be required for
the next five to fifteen years to properly investigate and
remediate these sites. The Company has accrued $2,085,000 for
estimated costs of remediating these two sites (excluding any
expenditures due to the fire and explosion at PFM), which is
projected to be the maximum exposure and is expected to be
performed over a period in excess of ten (10) years. The Company
expects to fund these expenses to remediate these two sites from
funds generated internally. This is a forward looking statement
and is subject to numerous conditions, including, but not limited
to, the Company's ability to generate sufficient cash flow from
operations to fund all costs of operations and remediation of these
two sites, the discovery of additional contamination or expanded
contamination which would result in a material increase in such
expenditures, or changes in governmental laws or regulations.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
PART II - Other Information
Item 1. Legal Proceedings
There are no additional legal proceedings pending against the
Company and/or its subsidiaries not previously reported by the
Company in Item 3 of its Form 10-K for the fiscal year ended
December 31, 1996, except for the following:
In connection with a fire and explosion at Perma-Fix of
Memphis, Inc.'s ("PFM") facility located in Memphis, Tennessee,
that stores, processes and blends hazardous and nonhazardous waste,
the Tennessee Department of Environment and Conservation ("TDEC")
issued an order, dated April 23, 1997, alleging that the facility
violated certain hazardous waste rules and regulations promulgated
by the TDEC and ordered the facility to, among other things, cease
fuel blending, termination within 30 days of the order a permit to
construct a new storage tank area, which had not yet been
constructed, implement certain actions and assessing a penalty of
approximately $144,000. PFM has filed an answer to such order
asserting, among other things, that the order was issued against an
improper party (the order being issued not against PFM but against
another subsidiary of the Company that did not own or operate the
facility), that PFM did not violate any rules or regulations of the
TDEC in connection with, or after, the fire and explosion and that
the assessment of a penalty against the facility was improper. The
Company intends for PFM to vigorously defend itself in connection
with this matter. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation."
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) Exhibits
________
Exhibit 4.1 - Ally Capital Corporation Equipment Lease
Agreement dated October 12, 1994.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K
___________________
No reports on Form 8-K were filed during the first quarter of
1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
Date: May 14, 1997 By: /s/ Dr. Louis F. Centofanti
____________________________
Dr. Louis F. Centofanti
Chairman of the Board
Chief Executive Officer
By: /s/ Richard T. Kelecy
____________________________
Richard T. Kelecy
Chief Financial Officer
EXHIBIT INDEX
Page No.
________
Exhibit 4.1 Ally Capital Corporation Equipment
Lease Agreement Dated October 12,
1994 . . . . . . . . . . . . . . . . . . . . . 21
Exhibit 27 Financial Data Schedule . . . . . . . . . . . . 48
ISTE:\N-P\PESI\10-Q\397\EDGAR\39710q