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 September
30, 2007
|
Or
|
o
|
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. 111596
|
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
(Exact
name of registrant as specified in its
charter)
|
Delaware
(State
or other jurisdiction
of
incorporation or organization)
|
58-1954497
(IRS
Employer Identification Number)
|
8302
Dunwoody Place, Suite 250, Atlanta, GA
(Address
of principal executive offices)
|
30350
(Zip
Code)
|
(770)
587-9898
(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
T
No
£
|
Indicate
by check mark whether the registrant is a large accelerated filer,
an
accelerated filer, or a non-accelerated filer. See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act. (Check one):
Large
accelerated filer £
Accelerated Filer T
Non-accelerated filer £
|
Indicate
by check mark whether the registrant is a shell company (as defined
in
Rule 12b-2 of the Exchange Act). Yes £
No
T
|
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 November 5, 2007
|
||
Common
Stock, $.001 Par Value
|
53,065,924
|
PART
I
|
FINANCIAL
INFORMATION
|
Page
No.
|
||||
Item
1.
|
Financial
Statements
|
|||||
Consolidated
Balance Sheets -
|
||||||
September
30, 2007 (unaudited) and December 31, 2006
|
1
|
|||||
|
||||||
Consolidated
Statements of Operations -
|
|
|||||
Three
and Nine Months Ended September 30, 2007 and 2006
(unaudited)
|
3
|
|||||
|
||||||
Consolidated
Statements of Cash Flows -
|
|
|||||
Nine
Months Ended September 30, 2007 and 2006 (unaudited)
|
4
|
|||||
|
||||||
Consolidated
Statement of Stockholders’ Equity -
|
|
|||||
Nine
Months Ended September 30, 2007 (unaudited)
|
5
|
|||||
|
||||||
Notes
to Consolidated Financial Statements
|
6
|
|||||
|
||||||
Item
2.
|
Management’s
Discussion and Analysis of
|
|
||||
Financial
Condition and Results of Operations
|
28
|
|||||
|
||||||
Item
3.
|
Quantitative
and Qualitative Disclosures
|
|
||||
About
Market Risk
|
56
|
|||||
|
||||||
Item
4.
|
Controls
and Procedures
|
57
|
||||
|
||||||
PART
II
|
OTHER
INFORMATION
|
|
||||
|
||||||
Item
1.
|
Legal
Proceedings
|
59
|
||||
|
||||||
Item
1A.
|
Risk
Factors
|
60
|
||||
|
||||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
60
|
||||
|
||||||
Item
5.
|
Other
Information
|
60
|
||||
|
||||||
Item
6.
|
Exhibits
|
61
|
September
30,
|
|
December
31,
|
|
||||
(Amounts
in Thousands, Except for Share Amounts)
|
|
2007
|
|
2006
|
|||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
|
$
|
108
|
$
|
2,528
|
|||
Restricted
cash
|
35
|
35
|
|||||
Investment
trading securities
|
84
|
¾
|
|||||
Accounts
receivable, net of allowance for doubtful
|
10,204
|
9,488
|
|||||
accounts
of $128 and $168
|
|||||||
Unbilled
receivables
|
11,383
|
12,313
|
|||||
Inventories
|
322
|
325
|
|||||
Prepaid
expenses
|
4,024
|
2,855
|
|||||
Other
receivables
|
41
|
1,596
|
|||||
Assets
for sale included in current assets, net of allowance
for
|
|||||||
doubtful
accounts of $274 and $247
|
6,069
|
7,100
|
|||||
Total
current assets
|
32,270
|
36,240
|
|||||
Property
and equipment:
|
|||||||
Buildings
and land
|
20,534
|
11,244
|
|||||
Equipment
|
30,125
|
20,599
|
|||||
Vehicles
|
141
|
141
|
|||||
Leasehold
improvements
|
11,458
|
11,452
|
|||||
Office
furniture and equipment
|
2,267
|
1,930
|
|||||
Construction-in-progress
|
1,461
|
4,609
|
|||||
65,986
|
49,975
|
||||||
Less
accumulated depreciation and amortization
|
(19,094
|
)
|
(16,630
|
)
|
|||
Net
property and equipment
|
46,892
|
33,345
|
|||||
Property
and equipment included in assets for sale, net of accumulated
depreciation
of $12,583 and $13,341
|
12,568
|
13,281
|
|||||
Intangibles
and other assets:
|
|||||||
Permits
|
15,625
|
11,025
|
|||||
Goodwill
|
9,418
|
1,330
|
|||||
Unbilled
receivable - non-current
|
3,276
|
2,600
|
|||||
Finite
Risk Sinking Fund
|
5,961
|
4,518
|
|||||
Other
assets
|
2,627
|
1,954
|
|||||
Intangibles
and other assets included in assets for sale
|
2,369
|
2,369
|
|||||
Total
assets
|
$
|
131,006
|
$
|
106,662
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
September
30, 2007
|
December
31,
|
||||||
(Amounts
in Thousands, Except for Share Amounts)
|
(Unaudited)
|
2006
|
|||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
3,753
|
$
|
2,456
|
|||
Current
environmental accrual
|
360
|
453
|
|||||
Accrued
expenses
|
14,918
|
8,118
|
|||||
Unearned
revenue
|
3,281
|
3,575
|
|||||
Current
liabilities related to asset held for sale
|
8,006
|
6,737
|
|||||
Current
portion of long-term debt
|
4,078
|
2,092
|
|||||
Total
current liabilities
|
34,396
|
23,431
|
|||||
Environmental
accruals
|
247
|
348
|
|||||
Accrued
closure costs
|
8,702
|
4,825
|
|||||
Other
long-term liabilities
|
3,411
|
3,018
|
|||||
Long-term
liabilities related to assets held for sale
|
3,722
|
3,895
|
|||||
Long-term
debt, less current portion
|
13,547
|
5,407
|
|||||
Total
long-term liabilities
|
29,629
|
17,493
|
|||||
Total
liabilities
|
64,025
|
40,924
|
|||||
Commitments
and Contingencies
|
|||||||
Preferred
Stock of subsidiary, $1.00 par value; 1,467,396
|
1,285
|
1,285
|
|||||
shares
authorized, 1,284,730 shares issued and
|
|||||||
outstanding,
liquidation value $1.00 per share
|
|||||||
Stockholders’
equity:
|
|||||||
Preferred
Stock, $.001 par value; 2,000,000 shares authorized,
|
|||||||
no
shares issued and outstanding
|
¾
|
¾
|
|||||
Common
Stock, $.001 par value; 75,000,000 shares authorized,
|
|||||||
53,055,924
and 52,053,744 shares issued, including 0 shares held
|
|||||||
and
988,000 shares of treasury stock retired in 2006,
respectively
|
53
|
52
|
|||||
Additional
paid-in capital
|
95,996
|
92,980
|
|||||
Stock
subscription receivable
|
(39
|
)
|
(79
|
)
|
|||
Accumulated
deficit
|
(30,314
|
)
|
(28,500
|
)
|
|||
Total
stockholders' equity
|
65,696
|
64,453
|
|||||
Total
liabilities and stockholders' equity
|
$
|
131,006
|
$
|
106,662
|
|||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
(Amounts
in Thousands, Except for Per Share Amounts)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Net
revenues
|
$
|
13,840
|
$
|
12,088
|
$
|
40,298
|
$
|
39,025
|
|||||
Cost
of goods sold
|
9,574
|
7,720
|
26,628
|
23,671
|
|||||||||
Gross
profit
|
4,266
|
4,368
|
13,670
|
15,354
|
|||||||||
Selling,
general and administrative expenses
|
4,061
|
3,564
|
11,535
|
10,654
|
|||||||||
(Gain)
loss on disposal of property and equipment
|
(4
|
)
|
¾
|
(1
|
)
|
1
|
|||||||
Income
from operations
|
209
|
804
|
2,136
|
4,699
|
|||||||||
Other
income (expense):
|
|||||||||||||
Interest
income
|
71
|
100
|
238
|
189
|
|||||||||
Interest
expense
|
(476
|
)
|
(276
|
)
|
(949
|
)
|
(995
|
)
|
|||||
Interest
expense-financing fees
|
(48
|
)
|
(48
|
)
|
(143
|
)
|
(144
|
)
|
|||||
Other
|
(41
|
)
|
(6
|
)
|
(48
|
)
|
(39
|
)
|
|||||
(Loss)
income from continuing operations before taxes
|
(285
|
)
|
574
|
1,234
|
3,710
|
||||||||
Income
tax (benefit) expense
|
(161
|
)
|
(26
|
)
|
23
|
152
|
|||||||
(Loss)
income from continuing operations
|
(124
|
)
|
600
|
1,211
|
3,558
|
||||||||
Loss
from discontinued operations, net of taxes
|
(1,828
|
)
|
(270
|
)
|
(3,025
|
)
|
(724
|
)
|
|||||
Net
(loss) income
|
(1,952
|
)
|
330
|
(1,814
|
)
|
2,834
|
|||||||
Preferred
Stock dividends
|
¾
|
¾
|
¾
|
¾
|
|||||||||
Net
(loss) income applicable to Common Stock
|
$
|
(1,952
|
)
|
$
|
330
|
$
|
(1,814
|
)
|
$
|
2,834
|
|||
Net
income (loss) per common share - basic
|
|||||||||||||
Continuing
operations
|
$
|
¾
|
$
|
.01
|
$
|
.02
|
$
|
.08
|
|||||
Discontinued
operations
|
(.04
|
)
|
¾
|
(.05
|
)
|
(.02
|
)
|
||||||
Net
(loss) income per common share
|
$
|
(.04
|
)
|
$
|
.01
|
$
|
(.03
|
)
|
$
|
.06
|
|||
Net
income (loss) per common share - diluted
|
|||||||||||||
Continuing
operations
|
$
|
¾
|
$
|
.01
|
$
|
.02
|
$
|
.08
|
|||||
Discontinued
operations
|
(.04
|
)
|
¾
|
(.05
|
)
|
(.02
|
)
|
||||||
Net
(loss) income per common share
|
$
|
(.04
|
)
|
$
|
.01
|
$
|
(.03
|
)
|
$
|
.06
|
|||
Number
of common shares used in computing
|
|||||||||||||
net
income (loss) per share:
|
|||||||||||||
Basic
|
52,843
|
50,541
|
52,349
|
46,851
|
|||||||||
Diluted
|
52,843
|
51,430
|
53,673
|
47,414
|
|||||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
Nine
Months Ended
|
|||||||
September
30,
|
|||||||
(Amounts
in Thousands)
|
2007
|
2006
|
|||||
Cash
flows from operating activities:
|
|||||||
Net
(loss) income
|
$
|
(1,814
|
)
|
$
|
2,834
|
||
Loss
on discontinued operations
|
3,025
|
724
|
|||||
Income
from continuing operations
|
1,211
|
3,558
|
|||||
Adjustments
to reconcile net (loss) income to cash provided by (used in)
operations:
|
|||||||
Depreciation
and amortization
|
2,745
|
2,322
|
|||||
Provision
(benefit) for bad debt and other reserves
|
52
|
(104
|
)
|
||||
(Gain)
loss on disposal of property and equipment
|
(1
|
)
|
1
|
||||
Issuance
of Common Stock for services
|
165
|
150
|
|||||
Share
based compensation
|
288
|
173
|
|||||
Changes
in operating assets and liabilities of continuing operations, net
of
|
|||||||
effects
from business acquisitions:
|
|||||||
Accounts
receivable
|
1,526
|
3,177
|
|||||
Unbilled
receivables
|
254
|
(5,067
|
)
|
||||
Prepaid
expenses, inventories and other assets
|
2,246
|
858
|
|||||
Accounts
payable, accrued expenses, and unearned revenue
|
(2,937
|
)
|
(3,781
|
)
|
|||
Cash
provided by continuing operations
|
5,549
|
1,287
|
|||||
Cash
provided by (used in) discontinued operations
|
481
|
(1,594
|
)
|
||||
Cash
provided by (used in) operating activities
|
6,030
|
(307
|
)
|
||||
Cash
flows from investing activities:
|
|||||||
Purchases
of property and equipment, net
|
(2,109
|
)
|
(3,322
|
)
|
|||
Proceeds
from sale of plant, property and equipment
|
7
|
¾
|
|||||
Change
in restricted cash, net
|
¾
|
(25
|
)
|
||||
Change
in finite risk sinking fund
|
(1,443
|
)
|
(1,133
|
)
|
|||
Cash
used for acquisition consideration, net of cash acquired
|
(2,685
|
)
|
¾
|
||||
Cash
used in investing activities of continuing operations
|
(6,230
|
)
|
(4,480
|
)
|
|||
Cash
used in investing activities of discontinued operations
|
(326
|
)
|
(76
|
)
|
|||
Cash
used in investing activities
|
(6,556
|
)
|
(4,556
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Net
borrowings (repayment) of revolving credit
|
5,202
|
(2,447
|
)
|
||||
Principal
repayments of long-term debt
|
(7,245
|
)
|
(1,507
|
)
|
|||
Proceeds
from issuance of stock
|
399
|
12,007
|
|||||
Repayment
of stock subscription receivable
|
40
|
8
|
|||||
Cash
(used in) provided by financing activities of continuing
operations
|
(1,604
|
)
|
8,061
|
||||
Principal
repayment of long-term debt for discontinued operations
|
(290
|
)
|
(312
|
)
|
|||
Cash
(used in) provided by financing activities
|
(1,894
|
)
|
7,749
|
||||
(Decrease)
Increase in cash
|
(2,420
|
)
|
2,886
|
||||
Cash
at beginning of period
|
2,528
|
94
|
|||||
Cash
at end of period
|
$
|
108
|
$
|
2,980
|
|||
Supplemental
disclosure:
|
|||||||
Interest
paid
|
$
|
314
|
$
|
691
|
|||
Non-cash
investing and financing activities:
|
|||||||
Long-term
debt incurred for purchase of property and equipment
|
613
|
94
|
|||||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
(Amounts
in thousands,
|
Common
Stock
|
Additional Paid-In
|
Stock Subscription
|
Accumulated
|
Total Stockholders'
|
||||||||||||||
except
for share amounts)
|
Shares
|
|
Amount
|
Capital
|
Receivable
|
Deficit
|
Equity
|
||||||||||||
Balance
at December 31, 2006
|
52,053,744
|
$
|
52
|
$
|
92,980
|
$
|
(79
|
)
|
$
|
(28,500
|
)
|
$
|
64,453
|
||||||
Net
Income
|
¾
|
¾
|
¾
|
¾
|
(1,814
|
)
|
(1,814
|
)
|
|||||||||||
Issuance
of Common Stock for cash
|
|||||||||||||||||||
and
services
|
69,187
|
¾
|
165
|
¾
|
¾
|
165
|
|||||||||||||
Issuance
of Common Stock upon
|
|||||||||||||||||||
exercise
of Options
|
223,786
|
¾
|
399
|
¾
|
¾
|
399
|
|||||||||||||
Common
Stock Issued in conjunction
|
|||||||||||||||||||
with
acquisition
|
709,207
|
1
|
2,164
|
2,165
|
|||||||||||||||
Share
based compensation
|
¾
|
¾
|
288
|
¾
|
¾
|
288
|
|||||||||||||
Repayment
of stock subscription receivable
|
¾
|
¾
|
¾
|
40
|
¾
|
40
|
|||||||||||||
Balance
at September 30, 2007
|
53,055,924
|
$
|
53
|
$
|
95,996
|
$
|
(39
|
)
|
$
|
(30,314
|
)
|
$
|
65,696
|
1.
|
Basis
of Presentation
|
2.
|
Summary
of Significant Accounting
Policies
|
3.
|
Stock
Based Compensation
|
4.
|
Earnings
Per Share
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
(Amounts
in thousands except per share amounts)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Earnings
per share from continuing operations
|
|||||||||||||
(Loss)
income from continuing operations
|
$
|
(124
|
)
|
$
|
600
|
$
|
1,211
|
$
|
3,558
|
||||
Preferred
stock dividends
|
¾
|
¾
|
¾
|
¾
|
|||||||||
(Loss)
income from continuing operations
|
(124
|
)
|
600
|
1,211
|
3,558
|
||||||||
applicable
to Common Stock
|
|||||||||||||
Effect
of dilutive securities:
|
|||||||||||||
Preferred
Stock dividends
|
¾
|
¾
|
¾
|
¾
|
|||||||||
(Loss)
income- diluted
|
$
|
(124
|
)
|
$
|
600
|
$
|
1,211
|
$
|
3,558
|
||||
Basic
income per share
|
$
|
¾
|
$
|
.01
|
$
|
.02
|
$
|
.08
|
|||||
Diluted
income per share
|
$
|
¾
|
$
|
.01
|
$
|
.02
|
$
|
.08
|
|||||
Loss
per share from discontinued operations
|
|||||||||||||
Loss
- basic and diluted
|
$
|
(1,828
|
)
|
$
|
(270
|
)
|
$
|
(3,025
|
)
|
$
|
(724
|
)
|
|
Basic
loss per share
|
$
|
(.04
|
)
|
$
|
¾
|
$
|
(.05
|
)
|
$
|
(.02
|
)
|
||
Diluted
loss per share
|
$
|
(.04
|
)
|
$
|
¾
|
$
|
(.05
|
)
|
$
|
(.02
|
)
|
||
Weighted
average common shares outstanding - basic
|
52,843
|
50,541
|
52,349
|
46,851
|
|||||||||
Potential
shares exercisable under stock option
|
|||||||||||||
plan
|
¾
|
479
|
771
|
253
|
|||||||||
Potential
shares upon exercise of Warrants
|
¾
|
410
|
553
|
310
|
|||||||||
Weighted
average common shares outstanding - diluted
|
52,843
|
51,430
|
53,673
|
47,414
|
|||||||||
Potential
shares excluded from above weighted average share calculations
due to
their anti-dilutive effect include:
|
|||||||||||||
Upon
exercise of options
|
217
|
385
|
232
|
1,190
|
|||||||||
Upon
exercise of Warrants
|
¾
|
1,776
|
¾
|
1,776
|
5.
|
Long
Term Debt
|
(Amounts
in Thousands)
|
September
30, 2007 (Unaudited)
|
December
31, 2006
|
|||||
Revolving
Credit
facility dated December 22, 2000, borrowings based
|
|||||||
upon
eligible accounts receivable, subject to monthly borrowing
base
|
|||||||
calculation,
variable interest paid monthly at prime rate plus ½%
|
|||||||
(8.75%
at September 30, 2007), balance due in November 2008.
|
$
|
5,202
|
$
|
¾
|
|||
Term
Loan
dated December 22, 2000, payable in equal monthly
|
|||||||
installments
of principal of $83, balance due in November 2008,
variable
|
|||||||
interest
paid monthly at prime rate plus 1% (9.25% at September 30,
2007).
|
4,750
|
5,500
|
|||||
Promissory
Note dated
June 25, 2001, payable in semiannual installments
|
|||||||
on
June 30 and December 31 through December 31, 2008,
variable
|
|||||||
interest
accrues at the applicable law rate determined under the
IRS
|
|||||||
Code
Section (10.0% on September 30, 2007) and is payable in one lump
|
|||||||
sum
at the end of installment period.
|
1,034
|
1,434
|
|||||
Promissory Note
dated June 25, 2007, payable in monthly installments
|
|||||||
of
principal of $160 starting July 2007 and $173 starting July
2008,
|
|||||||
variable
interest paid monthly at prime rate plus 1.125%
|
3,520
|
¾
|
|||||
Installment
Agreement in
the Agreement and Plan of Merger with
|
|||||||
Nuvotec
and PEcoS, dated April 27, 2007, payable in three equal yearly
|
|||||||
installment
of principal of $833 beginning June 2009. Interest accrues
at
|
|||||||
annual
rate of 8.25% on outstanding principal balance starting
|
|||||||
June
2007 and payable yearly starting June 2008
|
2,500
|
¾
|
|||||
Installment
Agreement
dated June 25, 2001, payable in semiannual IRS
|
|||||||
installments
on June 30 and December 31 through December 31, 2008,
|
|||||||
variable
interest accrues at the applicable law rate determined under
the
|
|||||||
Code
Section (10.0% on September 30, 2007) and is payable in one
|
|||||||
lump
sum at the end of installment period.
|
253
|
353
|
|||||
Various
capital lease and promissory note obligations, payable 2007
to
|
|||||||
2012,
interest at rates ranging from 5.0% to 15.7%.
|
1,262
|
1,042
|
|||||
18,521
|
8,329
|
||||||
Less
current portion of long-term debt
|
4,078
|
2,092
|
|||||
Less
long-term debt related to assets held for sale
|
896
|
830
|
|||||
$
|
13,547
|
$
|
5,407
|
6.
|
Commitments
and Contingencies
|
· |
cash
payment to the appropriate regulatory authority;
and
|
· |
supplemental
environmental projects consisting of one or more capital
projects.
|
7.
|
Discontinued
Operations
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
(Amounts
in Thousands)
|
September
30,
|
September
30,
|
|||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Net
revenues
|
$
|
7,960
|
$
|
9,178
|
$
|
23,347
|
$
|
26,874
|
|||||
Operating
loss from discontinued operations
|
$
|
(1,826
|
)
|
$
|
(270
|
)
|
$
|
(3,023
|
)
|
$
|
(724
|
)
|
|
Income
tax provision
|
$
|
2
|
$
|
¾
|
$
|
2
|
$
|
¾
|
|||||
Loss
from discontinued operations
|
$
|
(1,828
|
)
|
$
|
(270
|
)
|
$
|
(3,025
|
)
|
$
|
(724
|
)
|
(Amounts
in Thousands)
|
2007
|
2006
|
|||||
Account
receivable, net
|
$
|
4,915
|
$
|
5,768
|
|||
Inventories
|
391
|
522
|
|||||
Other
assets
|
3,132
|
3,179
|
|||||
Property,
plant and equipment, net
|
12,568
|
13,281
|
|||||
Total
assets held for sale
|
$
|
21,006
|
$
|
22,750
|
|||
Account
payable
|
$
|
2,247
|
$
|
2,132
|
|||
Accrued
expenses and other liabilities
|
4,857
|
3,760
|
|||||
Deferred
revenue
|
¾
|
¾
|
|||||
Note
payable
|
896
|
830
|
|||||
Environmental
liabilities
|
1,146
|
1,094
|
|||||
Total
liabilities held for sale
|
$
|
9,146
|
$
|
7,816
|
8.
|
Operating
Segments
|
·
|
from
which we may earn revenue and incur expenses;
|
·
|
whose
operating results are regularly reviewed by the segment president
to make
decisions about resources to be allocated to the segment and assess
its
performance; and
|
·
|
For
which discrete financial information is
available.
|
Nuclear
|
Engineering
|
Segments
Total
|
Corporate(2)
|
Consolidated
Total
|
|||||||||||||||||
Revenue
from external customers
|
$
|
13,211
|
(3
|
)
|
$
|
629
|
$
|
13,840
|
$
|
¾
|
$
|
13,840
|
|||||||||
Intercompany
revenues
|
1,036
|
305
|
1,341
|
¾
|
1,341
|
||||||||||||||||
Gross
profit
|
4,035
|
231
|
4,266
|
¾
|
4,266
|
||||||||||||||||
Interest
income
|
¾
|
¾
|
¾
|
71
|
71
|
||||||||||||||||
Interest
expense
|
240
|
¾
|
240
|
236
|
476
|
||||||||||||||||
Interest
expense-financing fees
|
¾
|
¾
|
¾
|
48
|
48
|
||||||||||||||||
Depreciation
and amortization
|
1,092
|
10
|
1,102
|
16
|
1,118
|
||||||||||||||||
Segment
profit (loss)
|
1,319
|
70
|
1,389
|
(1,513
|
)
|
(124
|
)
|
||||||||||||||
Segment
assets(1)
|
95,319
|
2,012
|
97,331
|
33,675
|
(4
|
)
|
131,006
|
||||||||||||||
Expenditures
for segment assets
|
488
|
¾
|
488
|
4
|
492
|
||||||||||||||||
Total
long-term debt
|
7,665
|
8
|
7,673
|
9,952
|
(5
|
)
|
17,625
|
||||||||||||||
|
Nuclear
|
Engineering
|
Segments
Total
|
|
|
Corporate(2)
|
|
Consolidated
Total
|
||||||||||||
Revenue
from external customers
|
$
|
11,023
|
(3
|
)
|
$
|
1,065
|
$
|
12,088
|
$
|
¾
|
$
|
12,088
|
||||||||
Intercompany
revenues
|
579
|
172
|
751
|
¾
|
751
|
|||||||||||||||
Gross
profit
|
4,127
|
241
|
4,368
|
¾
|
4,368
|
|||||||||||||||
Interest
income
|
¾
|
¾
|
¾
|
100
|
100
|
|||||||||||||||
Interest
expense
|
127
|
¾
|
127
|
149
|
276
|
|||||||||||||||
Interest
expense-financing fees
|
¾
|
¾
|
¾
|
48
|
48
|
|||||||||||||||
Depreciation
and amortization
|
784
|
10
|
794
|
14
|
808
|
|||||||||||||||
Segment
profit (loss)
|
1,997
|
95
|
2,092
|
(1,492
|
)
|
600
|
||||||||||||||
Segment
assets(1)
|
67,653
|
2,407
|
70,060
|
35,363
|
(4
|
)
|
105,423
|
|||||||||||||
Expenditures
for segment assets
|
1,994
|
8
|
2,002
|
25
|
2,027
|
|||||||||||||||
Total
long-term debt
|
2,515
|
17
|
2,532
|
5,750
|
(5
|
)
|
8,282
|
|||||||||||||
|
Nuclear
|
Engineering
|
Segments
Total
|
Corporate(2)
|
|
Consolidated
Total
|
||||||||||||||
Revenue
from external customers
|
$
|
38,560
|
(3
|
)
|
$
|
1,738
|
$
|
40,298
|
$
|
¾
|
$
|
40,298
|
||||||||
Intercompany
revenues
|
2,328
|
845
|
3,173
|
¾
|
3,173
|
|||||||||||||||
Gross
profit
|
13,106
|
564
|
13,670
|
¾
|
13,670
|
|||||||||||||||
Interest
income
|
1
|
¾
|
¾
|
237
|
238
|
|||||||||||||||
Interest
expense
|
462
|
1
|
463
|
486
|
949
|
|||||||||||||||
Interest
expense-financing fees
|
¾
|
¾
|
¾
|
143
|
143
|
|||||||||||||||
Depreciation
and amortization
|
2,666
|
27
|
2,693
|
52
|
2,745
|
|||||||||||||||
Segment
profit (loss)
|
5,625
|
162
|
5,787
|
(4,576
|
)
|
1,211
|
||||||||||||||
Segment
assets(1)
|
95,319
|
2,012
|
97,331
|
33,675
|
(4
|
)
|
131,006
|
|||||||||||||
Expenditures
for segment assets
|
2,337
|
13
|
2,350
|
17
|
2,367
|
|||||||||||||||
Total
long-term debt
|
7,665
|
8
|
7,673
|
9,952
|
(5
|
)
|
17,625
|
|||||||||||||
|
Nuclear
|
|
|
|
|
Engineering
|
|
|
Segments
Total
|
|
|
Corporate(2)
|
|
|
Consolidated
Total
|
|||||
Revenue
from external customers
|
$
|
36,288
|
(3
|
)
|
$
|
2,737
|
$
|
39,025
|
$
|
¾
|
$
|
39,025
|
||||||||
Intercompany
revenues
|
1,848
|
413
|
2,261
|
¾
|
2,261
|
|||||||||||||||
Gross
profit
|
14,662
|
692
|
15,354
|
¾
|
15,354
|
|||||||||||||||
Interest
income
|
¾
|
¾
|
¾
|
189
|
189
|
|||||||||||||||
Interest
expense
|
362
|
1
|
363
|
632
|
995
|
|||||||||||||||
Interest
expense-financing fees
|
¾
|
¾
|
¾
|
144
|
144
|
|||||||||||||||
Depreciation
and amortization
|
2,254
|
30
|
2,284
|
38
|
2,322
|
|||||||||||||||
Segment
profit (loss)
|
8,078
|
246
|
8,324
|
(4,766
|
)
|
3,558
|
||||||||||||||
Segment
assets(1)
|
67,653
|
2,407
|
70,060
|
35,363
|
(4
|
)
|
105,423
|
|||||||||||||
Expenditures
for segment assets
|
3,212
|
59
|
3,271
|
50
|
3,321
|
|||||||||||||||
Total
long-term debt
|
2,515
|
17
|
2,532
|
5,750
|
(5
|
)
|
8,282
|
(1) |
Segment
assets have been adjusted for intercompany accounts to reflect actual
assets for each segment.
|
(2) |
Amounts
reflect the activity for corporate headquarters not included in the
segment information.
|
(3)
|
The
consolidated revenues within the Nuclear segment include the LATA/Parallax
revenues for the three and nine months ended September 30, 2007,
which
total $2,029,000 or 14.7% and $7,167,000 or 17.8% of total revenues,
respectively. LATA/Parallax revenues for same periods in 2006 were
$2,672,000 or 22.1% and $7,344,000 or 18.8%.
|
(4)
|
Amount
includes assets from our discontinued operations of $21,006,000 and
$23,944,000 as of September 30, 2007 and 2006, respectively.
|
(5)
|
Includes
the balance outstanding from our revolving line of credit and term
loan,
which is utilized by all of our
segments.
|
9.
|
Income
Taxes
|
10.
|
Acquisition
of Nuvotec
|
(a) |
$2.3
million in cash at closing of the merger, with $1.5 million payable
to
unaccredited shareholders and $0.8 million payable to shareholders
of
Nuvotec that qualified as accredited investors pursuant to Rule 501
of
Regulation D promulgated under the Securities Act of 1933, as amended
(the
“Act”).
|
(b) |
Also
payable only to the shareholders of Nuvotec that qualified as accredited
investors:
|
· |
$2.5
million, payable over a four year period, unsecured and nonnegotiable
and
bearing an annual rate of interest of 8.25%, with (i) accrued interest
only payable on June 30, 2008, (ii) $833,333.33, plus accrued and
unpaid
interest, payable on June 30, 2009, (iii) $833,333.33, plus accrued
and
unpaid interest, payable on June 30, 2010, and (iv) the remaining
unpaid
principal balance, plus accrued and unpaid interest, payable on June
30,
2011 (collectively, the “Installment Payments”). The Installment Payments
may be prepaid at any time by Perma-Fix without penalty; and
|
· |
709,207
shares of Perma-Fix common stock, which were issued on July 23, 2007,
with
such number of shares determined by dividing $2.0 million by 95%
of
average of the closing price of the common stock as quoted on the
Nasdaq
during the 20 trading days period ending five business days prior
to the
closing of the merger. The value of these shares on June 13, 2007
was $2.2
million, which was determined by the average closing price of the
common
stock as quoted on the Nasdaq four days prior to and following the
completion date of the acquisition, which was June 13, 2007.
|
(c) |
The
assumption of $9.4 million of debt, $8.9 million of which was payable
to
KeyBank National Association which represents debt owed by PFNW under
a
credit facility. As part of the closing, the Company paid down $5.4
million of this debt resulting in debt remaining of $4.0
million.
|
(d) |
Transaction
costs totaling $0.6 million.
|
(Amounts
in thousands)
|
||||
Cash
|
$
|
2,300
|
||
Assumed
debt
|
9,412
|
|||
Installment
payments
|
2,500
|
|||
Common
Stock of the Company
|
2,165
|
|||
Transaction
costs
|
602
|
|||
Total
consideration
|
$
|
16,979
|
(Amounts
in thousands)
|
||||
Current
assets
|
$
|
2,834
|
||
Property,
plant and equipment
|
13,978
|
|||
Permits
|
4,500
|
|||
Goodwill
|
8,067
|
|||
Total
assets acquired
|
29,379
|
|||
Current
liabilities
|
(8,632
|
)
|
||
Non-current
liabilties
|
(3,768
|
)
|
||
Total
liabilities assumed
|
(12,400
|
)
|
||
Net
assets acquired
|
$
|
16,979
|
(Amounts
in Thousands, Except per Shares)
|
|||||||
Three
Months Ended September 30,
|
|||||||
(unaudited)
|
(unaudited)
|
||||||
2007
|
2006
|
||||||
Net
revenues
|
$
|
13,840
|
$
|
16,748
|
|||
Net
(loss) income
|
$
|
(124
|
)
|
$
|
2,089
|
||
Net
income per share - basic
|
$
|
¾
|
$
|
.04
|
|||
Net
income per share - diluted
|
$
|
¾
|
$
|
.04
|
|||
Weighted
average shares outstanding - basic
|
52,843
|
50,541
|
|||||
Weighted
average shares outstanding - diluted
|
52,843
|
51,430
|
Nine
Months Ended September 30,
|
|||||||
(unaudited)
|
(unaudited)
|
||||||
2007
|
2006
|
||||||
Net
revenues
|
$
|
44,736
|
$
|
49,905
|
|||
Net
income
|
$
|
633
|
$
|
5,573
|
|||
Net
income per share - basic
|
$
|
.01
|
$
|
.12
|
|||
Net
income per share - diluted
|
$
|
.01
|
$
|
.12
|
|||
Weighted
average shares outstanding - basic
|
52,349
|
46,851
|
|||||
Weighted
average shares outstanding - diluted
|
53,673
|
47,414
|
11.
|
Capital
Stock
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Aggregate
Intrinsic Value
|
||||||||||
Options
outstanding Janury 1, 2007
|
2,816,750
|
$
|
1.86
|
||||||||||
Granted
|
102,000
|
2.95
|
|||||||||||
Exercised
|
226,084
|
1.80
|
$
|
238,671
|
|||||||||
Forfeited
|
34,999
|
1.83
|
|||||||||||
Options
outstanding End of Period
|
2,657,667
|
1.91
|
4.8
|
$
|
3,086,524
|
||||||||
Options
Exercisable at September 30, 2007
|
1,965,000
|
$
|
1.87
|
4.6
|
$
|
2,358,911
|
|||||||
Options
Vested and expected to be vested at September 30, 2007
|
2,613,127
|
$
|
1.91
|
4.8
|
$
|
3,032,631
|
|||||||
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Aggregate
Intrinsic Value
|
||||||||||
Options
outstanding January 1, 2006
|
2,546,750
|
$
|
1.79
|
||||||||||
Granted
|
1,068,000
|
1.88
|
|||||||||||
Exercised
|
401,500
|
1.32
|
$
|
277,193
|
|||||||||
Forfeited
|
224,500
|
2.07
|
|||||||||||
Options
outstanding End of Period
|
2,988,750
|
1.86
|
5.5
|
$
|
742,028
|
||||||||
Options
Exercisable at September 30, 2006
|
1,930,750
|
$
|
1.85
|
5.4
|
$
|
537,748
|
|||||||
Options
Vested and expected to be vested at September 30, 2006
|
2,939,274
|
$
|
1.86
|
5.5
|
$
|
731,638
|
Options
Outstanding
|
|
Options
Exercisable
|
|||||||||||||||||
Description
and Range of Exercise Prices at September 30, 2007
|
Number
Outstanding
|
|
Weighted
Average Remaining Contractual Life
|
|
Weighted
Average Exercise Price
|
|
Number
Outstanding
|
|
Weighted
Average Remaining Contractual Life
|
|
Weighted
Average Exercise Price
|
||||||||
Performance
Equity Plan
|
9,000
|
1.0
|
$
|
1.25
|
9,000
|
1.0
|
$
|
1.25
|
|||||||||||
($1.25)
|
|||||||||||||||||||