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 June 30, 2017 |
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. |
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 ☒ No ☐ | |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☒ No ☐ | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer,” “accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller reporting company ☒ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act ☐ | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ 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 Common Stock, $.001 Par Value |
Outstanding at August 8, 2017 11,713,928 shares |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
INDEX
PART I | FINANCIAL INFORMATION | Page No. | ||
Item 1. |
Consolidated Condensed Financial Statements |
|||
Consolidated Balance Sheets - June 30, 2017 and December 31, 2016 |
1 | |||
Consolidated Statements of Operations - Three and Six Months Ended June 30, 2017 and 2016 |
3 | |||
Consolidated Statements of Comprehensive Loss - Three and Six Months Ended June 30, 2017 and 2016 |
4 | |||
Consolidated Statements of Stockholders’ Equity - Six Months Ended June 30, 2017 |
5 | |||
Consolidated Statements of Cash Flows - Six Months Ended June 30, 2017 and 2016 |
6 | |||
Notes to Consolidated Financial Statements |
7 | |||
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
20 | ||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
30 | ||
Item 4. |
Controls and Procedures |
30 | ||
PART II | OTHER INFORMATION | |||
Item 1. | Legal Proceedings | 31 | ||
Item 1A. | Risk Factors | 31 | ||
Item 6. | Exhibits | 31 |
PART I - FINANCIAL INFORMATION
ITEM 1. – Financial Statements
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Consolidated Balance Sheets
June 30, |
December 31, |
|||||||
2017 |
2016 |
|||||||
(Amounts in Thousands, Except for Share and per Share Amounts) |
(Unaudited) |
(Audited) |
||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash |
$ | 535 | $ | 163 | ||||
Accounts receivable, net of allowance for doubtful accounts of $352 and $272, respectively |
8,589 | 8,705 | ||||||
Unbilled receivables - current |
3,759 | 2,926 | ||||||
Inventories |
330 | 370 | ||||||
Prepaid and other assets |
2,653 | 2,358 | ||||||
Current assets related to discontinued operations |
92 | 85 | ||||||
Total current assets |
15,958 | 14,607 | ||||||
Property and equipment: |
||||||||
Buildings and land |
22,559 | 22,544 | ||||||
Equipment |
33,475 | 33,454 | ||||||
Vehicles |
398 | 409 | ||||||
Leasehold improvements |
11,626 | 11,626 | ||||||
Office furniture and equipment |
1,738 | 1,738 | ||||||
Construction-in-progress |
698 | 667 | ||||||
Total property and equipment |
70,494 | 70,438 | ||||||
Less accumulated depreciation |
(55,385 | ) | (53,323 | ) | ||||
Net property and equipment |
15,109 | 17,115 | ||||||
Property and equipment related to discontinued operations |
81 | 81 | ||||||
Intangibles and other long term assets: |
||||||||
Permits |
8,447 | 8,474 | ||||||
Other intangible assets - net |
1,573 | 1,721 | ||||||
Accounts receivable - non-current |
— | 212 | ||||||
Unbilled receivables - non-current |
228 | 216 | ||||||
Finite risk sinking fund |
15,608 | 21,487 | ||||||
Other assets |
1,051 | 1,154 | ||||||
Other assets related to discontinued operations |
232 | 268 | ||||||
Total assets |
$ | 58,287 | $ | 65,335 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Consolidated Balance Sheets, Continued
June 30, |
December 31, |
|||||||
2017 |
2016 |
|||||||
(Amounts in Thousands, Except for Share and per Share Amounts) |
(Unaudited) |
(Audited) |
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 3,911 | $ | 4,244 | ||||
Accrued expenses |
4,103 | 4,094 | ||||||
Disposal/transportation accrual |
1,785 | 1,390 | ||||||
Deferred revenue |
2,089 | 2,691 | ||||||
Accrued closure costs - current |
2,745 | 2,177 | ||||||
Current portion of long-term debt |
1,184 | 1,184 | ||||||
Current liabilities related to discontinued operations |
966 | 958 | ||||||
Total current liabilities |
16,783 | 16,738 | ||||||
Accrued closure costs, net of current portion |
4,355 | 5,138 | ||||||
Other long-term liabilities |
963 | 931 | ||||||
Deferred tax liabilities |
2,432 | 2,362 | ||||||
Long-term debt, less current portion |
3,255 | 7,649 | ||||||
Long-term liabilities related to discontinued operations |
364 | 361 | ||||||
Total long-term liabilities |
11,369 | 16,441 | ||||||
Total liabilities |
28,152 | 33,179 | ||||||
Commitments and Contingencies (Note 8) |
||||||||
Series B Preferred Stock of subsidiary, $1.00 par value; 1,467,396 shares authorized, 1,284,730 shares issued and outstanding, liquidation value $1.00 per share plus accrued and unpaid dividends of $963 and $931, respectively |
1,285 | 1,285 | ||||||
Stockholders' Equity: |
||||||||
Preferred Stock, $.001 par value; 2,000,000 shares authorized, no shares issued and outstanding |
— | — | ||||||
Common Stock, $.001 par value; 30,000,000 shares authorized; 11,705,989 and 11,677,025 shares issued, respectively; 11,698,347 and 11,669,383 shares outstanding, respectively |
11 | 11 | ||||||
Additional paid-in capital |
106,192 | 106,048 | ||||||
Accumulated deficit |
(76,109 | ) | (74,213 | ) | ||||
Accumulated other comprehensive loss |
(135 | ) | (162 | ) | ||||
Less Common Stock held in treasury, at cost; 7,642 shares |
(88 | ) | (88 | ) | ||||
Total Perma-Fix Environmental Services, Inc. stockholders' equity |
29,871 | 31,596 | ||||||
Non-controlling interest in subsidiary |
(1,021 | ) | (725 | ) | ||||
Total stockholders' equity |
28,850 | 30,871 | ||||||
Total liabilities and stockholders' equity |
$ | 58,287 | $ | 65,335 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
(Amounts in Thousands, Except for Per Share Amounts) |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Net revenues |
$ | 12,715 | $ | 14,809 | $ | 25,422 | $ | 24,847 | ||||||||
Cost of goods sold |
10,361 | 12,993 | 20,349 | 22,997 | ||||||||||||
Gross profit |
2,354 | 1,816 | 5,073 | 1,850 | ||||||||||||
Selling, general and administrative expenses |
2,833 | 2,375 | 5,684 | 5,431 | ||||||||||||
Research and development |
619 | 554 | 1,008 | 1,128 | ||||||||||||
(Gain) loss on disposal of property and equipment |
(1 | ) | (1 | ) | (1 | ) | 4 | |||||||||
Impairment loss on tangible assets |
— | 1,816 | — | 1,816 | ||||||||||||
Impairment loss on intangible assets |
— | 8,288 | — | 8,288 | ||||||||||||
Loss from operations |
(1,097 | ) | (11,216 | ) | (1,618 | ) | (14,817 | ) | ||||||||
Other income (expense): |
||||||||||||||||
Interest income |
36 | 31 | 71 | 47 | ||||||||||||
Interest expense |
(90 | ) | (108 | ) | (189 | ) | (276 | ) | ||||||||
Interest expense-financing fees |
(9 | ) | (29 | ) | (18 | ) | (85 | ) | ||||||||
Other |
— | 21 | — | 21 | ||||||||||||
Loss from continuing operations before taxes |
(1,160 | ) | (11,301 | ) | (1,754 | ) | (15,110 | ) | ||||||||
Income tax expense (benefit) |
66 | (3,167 | ) | 147 | (3,130 | ) | ||||||||||
Loss from continuing operations, net of taxes |
(1,226 | ) | (8,134 | ) | (1,901 | ) | (11,980 | ) | ||||||||
Loss from discontinued operations (net of taxes of $0) |
(160 | ) | (264 | ) | (291 | ) | (431 | ) | ||||||||
Net loss |
(1,386 | ) | (8,398 | ) | (2,192 | ) | (12,411 | ) | ||||||||
Net loss attributable to non-controlling interest |
(217 | ) | (164 | ) | (296 | ) | (337 | ) | ||||||||
Net loss attributable to Perma-Fix Environmental Services, Inc. common stockholders |
$ | (1,169 | ) | $ | (8,234 | ) | $ | (1,896 | ) | $ | (12,074 | ) | ||||
Net loss per common share attributable to Perma-Fix Environmental Services, Inc. stockholders - basic and diluted: |
||||||||||||||||
Continuing operations |
$ | (.09 | ) | $ | (.69 | ) | $ | (.14 | ) | $ | (1.00 | ) | ||||
Discontinued operations |
(.01 | ) | (.02 | ) | (.02 | ) | (.04 | ) | ||||||||
Net loss per common share |
$ | (.10 | ) | $ | (.71 | ) | $ | (.16 | ) | $ | (1.04 | ) | ||||
Number of common shares used in computing net loss per share: |
||||||||||||||||
Basic |
11,698 | 11,574 | 11,690 | 11,566 | ||||||||||||
Diluted |
11,698 | 11,574 | 11,690 | 11,566 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Consolidated Statements of Comprehensive Loss
(Unaudited)
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
(Amounts in Thousands) |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Net loss |
$ | (1,386 | ) | $ | (8,398 | ) | $ | (2,192 | ) | $ | (12,411 | ) | ||||
Other comprehensive income (loss): |
||||||||||||||||
Foreign currency translation gain (loss) |
15 | (70 | ) | 27 | (17 | ) | ||||||||||
Comprehensive loss |
(1,371 | ) | (8,468 | ) | (2,165 | ) | (12,428 | ) | ||||||||
Comprehensive loss attributable to non-controlling interest |
(217 | ) | (164 | ) | (296 | ) | (337 | ) | ||||||||
Comprehensive loss attributable to Perma-Fix Environmental Services, Inc. stockholders |
$ | (1,154 | ) | $ | (8,304 | ) | $ | (1,869 | ) | $ | (12,091 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC
Consolidated Statement of Stockholders’ Equity
For the Six Months Ended June 30, 2017
Common Stock |
Additional Paid-In |
Common Stock Held In |
Accumulated Other Comprehensive |
Non-controlling Interest in |
Accumulated |
Total Stockholders' |
||||||||||||||||||||||||||
(Amounts in thousands, except for share amounts) |
Shares |
Amount |
Capital | Treasury | Loss | Subsidiary | Deficit | Equity | ||||||||||||||||||||||||
Balance at December 31, 2016 (Audited) |
11,677,025 | $ | 11 | $ | 106,048 | $ | (88 | ) | $ | (162 | ) | $ | (725 | ) | $ | (74,213 | ) | $ | 30,871 | |||||||||||||
Net loss |
— | — | — | — | — | (296 | ) | (1,896 | ) | (2,192 | ) | |||||||||||||||||||||
Foreign currency translation |
— | — | — | — | 27 | — | — | 27 | ||||||||||||||||||||||||
Issuance of Common Stock for services |
28,964 | — | 103 | — | — | — | — | 103 | ||||||||||||||||||||||||
Stock-Based Compensation |
— | — | 41 | — | — | — | — | 41 | ||||||||||||||||||||||||
Balance at June 30, 2017 (Unaudited) |
11,705,989 | $ | 11 | $ | 106,192 | $ | (88 | ) | $ | (135 | ) | $ | (1,021 | ) | $ | (76,109 | ) | $ | 28,850 |
The accompanying notes are an integral part of these condensed consolidated financial statements. |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended |
||||||||
June 30, |
||||||||
(Amounts in Thousands) |
2017 |
2016 |
||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (2,192 | ) | $ | (12,411 | ) | ||
Less: loss from discontinued operations, net of taxes of $0 |
(291 | ) | (431 | ) | ||||
Loss from continuing operations, net of taxes |
(1,901 | ) | (11,980 | ) | ||||
Adjustments to reconcile loss from continuing operations to cash used in operating activities: |
||||||||
Depreciation and amortization |
2,288 | 1,796 | ||||||
Amortization of debt discount |
18 | 151 | ||||||
Deferred tax expense (benefit) |
70 | (3,130 | ) | |||||
Provision for (recovery of) bad debt reserves |
81 | (351 | ) | |||||
(Gain) loss on disposal of property and equipment |
(1 | ) | 4 | |||||
Impairment loss on tangible assets |
― | 1,816 | ||||||
Impairment loss on intangible assets |
― | 8,288 | ||||||
Issuance of common stock for services |
103 | 116 | ||||||
Stock-based compensation |
41 | 45 | ||||||
Changes in operating assets and liabilities of continuing operations |
||||||||
Restricted cash |
― | 35 | ||||||
Accounts receivable |
246 | (189 | ) | |||||
Unbilled receivables |
(845 | ) | 1,186 | |||||
Prepaid expenses, inventories and other assets |
37 | 1,789 | ||||||
Accounts payable, accrued expenses and unearned revenue |
(881 | ) | (1,041 | ) | ||||
Cash used in continuing operations |
(744 | ) | (1,465 | ) | ||||
Cash used in discontinued operations |
(284 | ) | (458 | ) | ||||
Cash used in operating activities |
(1,028 | ) | (1,923 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(116 | ) | (28 | ) | ||||
Proceeds from sale of property and equipment |
7 | 2 | ||||||
Proceeds from/(payment to) finite risk sinking fund |
5,880 | (45 | ) | |||||
Cash provided by (used in) investing activities of continuing operations |
5,771 | (71 | ) | |||||
Cash provided by investing activities of dicontinued operations |
34 | 51 | ||||||
Cash provided by (used in) investing activities |
5,805 | (20 | ) | |||||
Cash flows from financing activities: |
||||||||
Repayments of revolving credit borrowings |
(22,755 | ) | (26,594 | ) | ||||
Borrowing on revolving credit |
18,952 | 29,131 | ||||||
Release of proceeds for stock subscription for Perma-Fix Medical S.A. previously held in escrow |
― | 64 | ||||||
Principal repayments of long term debt |
(609 | ) | (889 | ) | ||||
Principal repayments of long term debt-related party |
― | (750 | ) | |||||
Payment of debt issuance costs |
― | (71 | ) | |||||
Cash (used in) provided by financing activities of continuing operations |
(4,412 | ) | 891 | |||||
Effect of exchange rate changes on cash |
7 | (4 | ) | |||||
Increase (decrease) in cash |
372 | (1,056 | ) | |||||
Cash at beginning of period |
163 | 1,435 | ||||||
Cash at end of period |
$ | 535 | $ | 379 | ||||
Supplemental disclosure: |
||||||||
Interest paid |
$ | 194 | $ | 204 | ||||
Income taxes paid |
12 | 25 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Notes to Consolidated Condensed Financial Statements
June 30, 2017
(Unaudited)
Reference is made herein to the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.
1. |
Basis of Presentation |
The consolidated condensed financial statements included herein have been prepared by the Company (which may be referred to as we, us or our), without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“the Commission”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 condensed 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. The results of operations for the six months ended June 30, 2017 are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2017.
The Company suggests that these consolidated condensed 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, 2016.
Reclassification
Certain prior year amounts have been reclassified to conform to the current year presentation.
2. |
Summary of Significant Accounting Policies |
Recently Issued Accounting Standards – Not Yet Adopted
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," as amended, which will supersede nearly all existing revenue recognition guidance. ASU 2014-09 provides a single, comprehensive revenue recognition model for all contracts with customers. ASU 2014-09 requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted for ASU 2014-09, as amended, to the original effective date of the period beginning after December 15, 2016 (including interim reporting periods within those periods). ASU 2014-09 may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently analyzing the effect of the standard across all of its revenue streams to evaluate the impact of the new standard on revenue contracts. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. The Company plans to adopt the standard in the first quarter of 2018 and anticipates using the modified retrospective method by recognizing the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is still evaluating the potential impact of adopting this guidance on our financial statements.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)," which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. Subsequently, in November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230), Restricted Cash, a consensus of the FASB Emerging Issues Task Force," which clarifies the guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flow. ASU 2016-15 and ASU 2016-18 are effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company does not expect the adoption of these ASUs to have a material impact on our financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which eliminates the existing exception in U.S. GAAP prohibiting the recognition of the income tax consequences for intra-entity asset transfers. Under ASU 2016-16, entities will be required to recognize the income tax consequences of intra-entity asset transfers other than inventory when the transfer occurs. ASU 2016-16 is effective on a modified retrospective basis for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on our financial statements.
In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805) – Clarifying the Definition of a Business.” ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisition, disposals, goodwill and consolidation. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements
In January 2017, the FASB issued ASU No. 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 232) – Amendments to SEC Paragraphs Pursuant to staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings.” This amendment states that registrants should consider additional qualitative disclosures if the impact of an issued but not yet adopted ASU is unknown or cannot be reasonably estimated and to include a description of the effect of the accounting policies that the registrant expects to apply, if determined. Transition guidance included in certain issued but not yet adopted ASUs were also updated to reflect this update. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations and cash flows.
In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and early adoption is permitted, including in an interim period. ASU 2017-09 is to be applied on a prospective basis to an award modified on or after the adoption date. The Company does not expect the adoption of ASU 2017-09 to have a material impact on our financial statements.
3. |
Intangible Assets |
The following table summarizes information relating to the Company’s definite-lived intangible assets:
June 30, 2017 |
December 31, 2016 |
||||||||||||||||||||||||||||
Useful |
Gross |
Net |
Gross |
Net |
|||||||||||||||||||||||||
Lives |
Carrying |
Accumulated |
Carrying |
Carrying |
Accumulated |
Carrying |
|||||||||||||||||||||||
(Years) |
Amount |
Amortization |
Amount |
Amount |
Amortization |
Amount |
|||||||||||||||||||||||
Intangibles (amount in thousands) |
|||||||||||||||||||||||||||||
Patent |
3 | - | 17 | $ | 591 | (290 | ) | $ | 301 | $ | 577 | $ | (274 | ) | $ | 303 | |||||||||||||
Software |
3 | 405 | (393 | ) | 12 | 405 | (383 | ) | 22 | ||||||||||||||||||||
Customer relationships |
12 | 3,370 | (2,110 | ) | 1,260 | 3,370 | (1,974 | ) | 1,396 | ||||||||||||||||||||
Permit |
10 | 545 | (455 | ) | 90 | 545 | (428 | ) | 117 | ||||||||||||||||||||
Total |
$ | 4,911 | $ | (3,248 | ) | $ | 1,663 | $ | 4,897 | $ | (3,059 | ) | $ | 1,838 |
The intangible assets noted above are amortized on a straight-line basis over their useful lives with the exception of customer relationships which are being amortized using an accelerated method. The Company has only one definite-lived permit that is subject to amortization.
The following table summarizes the expected amortization over the next five years for our definite-lived intangible assets (including the one definite-lived permit):
Amount |
||||
Year |
(In thousands) |
|||
2017 (remaining) |
$ | 184 | ||
2018 |
337 | |||
2019 |
254 | |||
2020 |
218 | |||
2021 |
198 |
Amortization expenses relating to the definite-lived intangible assets as discussed above was $95,000 and $189,000 for the three and six months ended June 30, 2017, respectively, and $138,000 and $240,000 for the three and six months ended June 30, 2016, respectively.
4. |
Capital Stock, Stock Plans and Stock-Based Compensation |
The Company has certain stock option plans under which it awards incentive and non-qualified stock options to employees, officers, and outside directors.
On January 13, 2017, the Company granted 6,000 non-qualified stock options (“NQSOs”) from the Company’s 2003 Outside Directors Stock Plan to a new director elected by the Company’s Board of Directors (“Board”) to fill the vacancy left by Mr. Jack Lahav who retired from the Board in October 2016. The options granted were for a contractual term of ten years with a vesting period of six months. The exercise price of the NQSO was $3.79 per share, which was equal to our closing stock price the day preceding the grant date, pursuant to the 2003 Outside Directors Stock Plan.
On May 15, 2016, the Company granted 50,000 incentive stock options (“ISOs”) from the Company’s 2010 Stock Option Plan to our Executive Vice President (“EVP”)/Chief Operating Officer (“COO”). The ISOs granted were for a contractual term of six years with one-third yearly vesting over a three year period. The exercise price of the ISO was $3.97 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant.
The summary of the Company’s total Stock Option Plans as of June 30, 2017, as compared to June 30, 2016, and changes during the periods then ended, are presented below. The Company’s Plans consist of the 2010 Stock Option Plan and the 2003 Outside Directors Stock Plan:
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term (years) |
Aggregate Intrinsic Value (2) |
|||||||||||||
Options outstanding January 1, 2017 |
247,200 | $ | 6.69 | |||||||||||||
Granted |
6,000 | 3.79 | ||||||||||||||
Exercised | ─ | ─ | ||||||||||||||
Forfeited/expired |
(30,000 | ) | 5.00 | |||||||||||||
Options outstanding end of period (1) |
223,200 | $ | 6.84 | 4.5 | $ | 13,080 | ||||||||||
Options exercisable at June 30, 2017(1) |
180,534 | $ | 7.51 | 4.3 | $ | 13,080 | ||||||||||
Options exercisable and expected to be vested at June 30, 2017 |
223,200 | $ | 6.84 | 4.5 | $ | 13,080 |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term (years) |
Aggregate Intrinsic Value(2) |
|||||||||||||
Options outstanding January 1, 2016 |
218,000 | $ | 7.65 | |||||||||||||
Granted |
50,000 | 3.79 | ||||||||||||||
Exercised |
─ | ─ | ||||||||||||||
Forfeited/expired |
─ | ─ | ||||||||||||||
Options outstanding end of period (1) |
268,000 | $ | 6.96 | 4.6 | $ | 134,102 | ||||||||||
Options exercisable at June 30, 2016(1) |
181,533 | $ | 8.18 | 4.4 | $ | 74,802 | ||||||||||
Options exercisable and expected to be vested at June 30, 2016 |
254,883 | $ | 7.10 | 4.6 | $ | 125,230 |
The Company estimates the fair value of stock options using the Black-Scholes valuation model. Assumptions used to estimate the fair value of stock options granted include the exercise price of the award, the expected term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the expected annual dividend yield.
Outside Director Stock Options Granted |
||||
January 13, 2017 |
||||
Weighted-average fair value per option |
$ | 2.63 | ||
Risk -free interest rate (1) |
2.40% | |||
Expected volatility of stock (2) |
56.32% | |||
Dividend yield |
None | |||
Expected option life (years) (3) |
10.0 |
Employee Stock Option Granted |
||||
May 15, 2016 |
||||
Weighted-average fair value per share |
$ | 2.00 | ||
Risk -free interest rate (1) |
1.27% | |||
Expected volatility of stock (2) |
53.12% | |||
Dividend yield |
None | |||
Expected option life (years) (3) |
6.0 |
|
(1) |
The risk-free interest rate is based on the U.S. Treasury yield in effect at the grant date over the expected term of the option. |
|
(2) |
The expected volatility is based on historical volatility from our traded Common Stock over the expected term of the option. |
|
(3) |
The expected option life is based on historical exercises and post-vesting data. |
The following table summarizes stock-based compensation recognized for the three and six months ended June 30, 2017 and 2016 for our employee and director stock options.
Three Months Ended |
Six Months Ended |
|||||||||||||||
Stock Options |
June 30, |
June 30, |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||||||
Employee Stock Options |
$ | 11,000 | $ | 17,000 | $ | 21,000 | $ | 31,000 | ||||||||
Director Stock Options |
8,000 | — | 20,000 | 14,000 | ||||||||||||
Total |
$ | 19,000 | $ | 17,000 | $ | 41,000 | $ | 45,000 |
As of June 30, 2017, the Company has approximately $64,000 of total unrecognized compensation cost related to unvested options, of which $18,000 is expected to be recognized in remaining 2017, $33,000 in 2018, with the remaining $13,000 in 2019.
During the six months ended June 30, 2017, the Company issued a total of 28,964 shares of its common stock under the 2003 Outside Directors Stock Plan to its outside directors as compensation for serving on our Board. The Company has recorded approximately $110,000 in compensation expenses for the six months ended June 30, 2017 (included in selling, general and administration expenses) in connection with the issuance of shares of its common stock to outside directors.
5. |
Income (Loss) Per Share |
Basic income (loss) per share is calculated based on the weighted-average number of outstanding common shares during the applicable period. Diluted income (loss) per share is based on the weighted-average number of outstanding common shares plus the weighted-average number of potential outstanding common shares. In periods where they are anti-dilutive, such amounts are excluded from the calculations of dilutive earnings per share. The following table reconciles the loss and average share amounts used to compute both basic and diluted loss per share:
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||
(Amounts in Thousands, Except for Per Share Amounts) |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Net loss attributable to Perma-Fix Environmental Services, Inc., common stockholders: |
||||||||||||||||
Loss from continuing operations attributable to Perma-Fix Environmental Services, Inc. common stockholders |
$ | (1,009 | ) | $ | (7,970 | ) | $ | (1,605 | ) | $ | (11,643 | ) | ||||
Loss from discontinuing operations attributable to Perma-Fix Environmental Services, Inc. common stockholders |
(160 | ) | (264 | ) | (291 | ) | (431 | ) | ||||||||
Net loss attributable to Perma-Fix Environmental Services, Inc. common stockholders |
$ | (1,169 | ) | $ | (8,234 | ) | $ | (1,896 | ) | $ | (12,074 | ) | ||||
Basic loss per share attributable to Perma-Fix Environmental Services, Inc. common stockholders |
$ | (.10 | ) | $ | (.71 | ) | $ | (.16 | ) | $ | (1.04 | ) | ||||
Diluted loss per share attributable to Perma-Fix Environmental Services, Inc. common stockholders |
$ | (.10 | ) | $ | (.71 | ) | $ | (.16 | ) | $ | (1.04 | ) | ||||
Weighted average shares outstanding: |
||||||||||||||||
Basic weighted average shares outstanding |
11,698 | 11,574 | 11,690 | 11,566 | ||||||||||||
Add: dilutive effect of stock options |
— | — | — | — | ||||||||||||
Add: dilutive effect of warrants |
— | — | — | — | ||||||||||||
Diluted weighted average shares outstanding |
11,698 | 11,574 | 11,690 | 11,566 | ||||||||||||
Potential shares excluded from above weighted average share calcualtions due to their anti-dilutive effect include: |
||||||||||||||||
Upon exercise of options |
205 | 171 | 205 | 183 |
6. |
Long Term Debt |
Long-term debt consists of the following at June 30, 2017 and December 31, 2016:
(Amounts in Thousands) |
June 30, 2017 |
December 31, 2016 |
||||||
Revolving Credit facility dated October 31, 2011, as amended, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due March 24, 2021. Effective interest rate for the first six months of 2017 was 4.4%. (1) |
$ | — | $ | 3,803 | ||||
Term Loan dated October 31, 2011, as amended, payable in equal monthly installments of principal of $102, balance due on March 24, 2021. Effective interest rate for first six months of 2017 was 4.4%. (1) (2) |
4,439 | (3) | 5,030 | (3) | ||||
Total debt |
4,439 | 8,833 | ||||||
Less current portion of long-term debt |
1,184 | 1,184 | ||||||
Long-term debt |
$ | 3,255 | $ | 7,649 |
(1) Our revolving credit facility is collateralized by our accounts receivable and our term loan is collateralized by our property and equipment.
(2) Prior to April 1, 2016, the monthly installment payment under the term loan was approximately $190,000.
(3) Net of debt issuance costs of ($133,000) and ($151,000) at June 30, 2017 and December 31, 2016, respectively.
Revolving Credit and Term Loan Agreement
The Company entered into an Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated October 31, 2011 (“Loan Agreement”), with PNC National Association (“PNC”), acting as agent and lender. The Loan Agreement, as subsequently amended (“Amended Loan Agreement”), provides the Company with the following credit facility with a maturity date of March 24, 2021: (a) up to $12,000,000 revolving credit (“revolving credit”), subject to the amount of borrowings based on a percentage of eligible receivables (as defined) and (b) a term loan (“term loan”) of approximately $6,100,000, which requires monthly installments of approximately $101,600 (based on a seven-year amortization).
Under the Amended Loan Agreement, the Company has the option of paying an annual rate of interest due on the revolving credit at prime (4.25% at June 30, 2017) plus 2% or London Inter Bank Offer Rate (“LIBOR”) plus 3% and the term loan at prime plus 2.5% or LIBOR plus 3.5%.
Pursuant to the Amended Loan Agreement, the Company may terminate the Amended Loan Agreement, upon 90 days’ prior written notice upon payment in full of its obligations under the Amended Loan Agreement. The Company agreed to pay PNC 1.0% of the total financing in the event the Company had paid off its obligations on or before March 23, 2017, .50% of the total financing if the Company pays off its obligations after March 23, 2017 but prior to or on March 23, 2018, and .25% of the total financing if the Company pays off its obligations after March 23, 2018 but prior to or on March 23, 2019. No early termination fee shall apply if the Company pays off its obligations after March 23, 2019.
At June 30, 2017, the availability under our revolving credit was $3,302,000, based on our eligible receivables and includes an indefinite reduction of borrowing availability of $2,000,000 that the Company’s lender has imposed, which includes $750,000 that was imposed immediately upon the Company’s receipt of finite risk sinking funds on May 1, 2017, in connection with the cancellation of the closure policy for the Company’s Perma-Fix Northwest Richland, Inc. (“PFNWR”) subsidiary (see “Note 8 – Commitments and Contingencies – Insurance” below for further information of the PFNWR closure policy and the receipt of the related sinking funds).
The Company’s credit facility with PNC contains certain financial covenants, along with customary representations and warranties. A breach of any of these financial covenants, unless waived by PNC, could result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit. The Company met its quarterly financial covenants in the first and second quarters of 2017 and expects to meet its quarterly financial covenants in each of the remaining quarters of 2017 and the first nine months of 2018.
7. |
East Tennessee Materials and Energy Corporation (“M&EC”) |
The Company continues its plan to close its M&EC facility by the end of the M&EC’s lease term of January 21, 2018. Operations at the M&EC facility are continuing during the remaining term of the lease and the facility continues to transition waste shipments and operational capabilities to our other Treatment Segment facilities, subject to customer requirements and regulatory approvals. Simultaneously, the Company continues with the required clean-up/maintenance procedures at M&EC’s Oak Ridge, Tennessee facility in accordance with M&EC’s Resource Conservation and Recovery Act (“RCRA”) permit requirements.
At June 30, 2017, total accrued closure liabilities for our M&EC subsidiary totaled approximately $2,745,000 which are recorded as current liabilities. At December 31, 2016, M&EC had long-term closure liabilities of approximately $881,000 which were reclassified to current at March 31, 2017. The following reflects changes to the closure liabilities for the M&EC subsidiary from year end 2016:
Amounts in thousands |
||||
Balance as of December 31, 2016 |
3,058 | |||
Accretion expense |
94 | |||
Payments |
(407 | ) | ||
Balance as of June 30, 2017 |
$ | 2,745 |
Revenues for the M&EC subsidiary were $1,692,000 and $5,072,000 for the three and six months ended June 30, 2017, respectively, and $1,382,000 and $2,755,000 for the corresponding periods of 2016, respectively.
8. |
Commitments and Contingencies |
Hazardous Waste
In connection with our waste management services, we process both hazardous and non-hazardous waste, which we transport to our own, or other, facilities for destruction or disposal. As a result of disposing of hazardous substances, in the event any cleanup is required, we could be a potentially responsible party for the costs of the cleanup notwithstanding any absence of fault on our part.
Legal Matters
In the normal course of conducting our business, we are involved in various litigation. We are not a party to any litigation or governmental proceeding which our management believes could result in any judgments or fines against us that would have a material adverse effect on our financial position, liquidity or results of future operations.
Insurance
The Company has a 25-year finite risk insurance policy entered into in June 2003 with American International Group, Inc. (“AIG”), which provides financial assurance to the applicable states for our permitted facilities in the event of unforeseen closure. The policy, as amended, provides for a maximum allowable coverage of $39,000,000 and has available capacity to allow for annual inflation and other performance and surety bond requirements. All of the required payments for this finite risk insurance policy, as amended, were previously made by the Company. At June 30, 2017, our financial assurance coverage amount under this policy totaled approximately $29,473,000. The Company has recorded $15,608,000 and $15,546,000 in sinking funds related to this policy in other long term assets on the accompanying Consolidated Balance Sheets at June 30, 2017 and December 31, 2016, respectively, which includes interest earned of $1,136,000 and $1,075,000 on the sinking funds as of June 30, 2017 and December 31, 2016, respectively. Interest income for the three and six months ended June 30, 2017 was approximately $34,000 and $61,000, respectively. Interest income for the three and six month periods ended June 30, 2016, was approximately $24,000 and $38,000, respectively. If the Company so elects, AIG is obligated to pay us an amount equal to 100% of the sinking fund account balance in return for complete release of liability from both us and any applicable regulatory agency using this policy as an instrument to comply with financial assurance requirements.
The Company also had a finite risk insurance policy dated August 2007 for our PFNWR facility with AIG (“PFNWR policy”) which provided financial assurance to the State of Washington in the event of closure of the PFNWR facility. The Company had recorded $5,941,000 in finite risk sinking funds at December 31, 2016 in other long term assets on the accompanying Consolidated Balance Sheets which included interest earned of $241,000 on the sinking fund. In April 2017, the Company received final releases from state and federal regulators for the PFNWR policy which enabled the Company to cancel the PFNWR policy resulting in the release of approximately $5,951,000 on May 1, 2017 in finite sinking funds previously held by AIG as collateral for the PFNWR policy. The Company used the released finite sinking funds to pay off its revolving credit with the remaining funds to be used for general working capital needs. The Company has acquired new bonds in the required amount of approximately $7,000,000 (“new bonds”) to replace the PFNWR policy in providing financial assurance for the PFNWR facility. Upon receipt of the $5,951,000 in finite sinking funds from AIG, the Company and its lender executed a standby letter of credit in the amount of $2,500,000 as collateral for the new bonds for the PFNWR facility. In addition, the Company’s lender placed an additional $750,000 restriction on the Company’s borrowing availability pursuant to a “Condition Subsequent” clause in the November 17, 2016 amendment that the Company entered into with its lender. Interest income earned under the PFNWR policy for the three and six months ended June 30, 2017 was approximately $2,000 and $10,000, respectively. Interest income for the three and six month periods ended June 30, 2016, was approximately $5,000 and $7,000, respectively.
Letter of Credits and Bonding Requirements
From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. At June 30, 2017, the total amount of standby letters of credit outstanding totaled approximately $2,675,000 and the total amount of bonds outstanding totaled approximately $8,253,000.
9. |
Discontinued Operations |
The Company’s discontinued operations consist of all our subsidiaries included in our Industrial Segment: (1) subsidiaries divested in 2011 and prior, (2) two previously closed locations, and (3) our PFSG facility, which is currently in the process of undergoing closure, subject to regulatory approval of necessary plans and permits.
The Company’s discontinued operations had losses of $160,000 and $264,000 for the three months ended June 30, 2017 and 2016, respectively (net of taxes of $0 for each period) and losses of $291,000 and $431,000 for the six months ended June 30, 2017 and 2016, respectively (net of taxes of $0 for each period). The losses were primarily due to costs incurred in the administration and continued monitoring of our discontinued operations. The Company’s discontinued operations had no revenues for each of the periods noted above.
The following table presents the major class of assets of discontinued operations at June 30, 2017 and December 31, 2016.
June 30, |
December 31, |
|||||||
(Amounts in Thousands) |
2017 |
2016 |
||||||
Current assets |
||||||||
Other assets |
$ | 92 | $ | 85 | ||||
Total current assets |
92 | 85 | ||||||
Long-term assets |
||||||||
Property, plant and equipment, net (1) |
81 | 81 | ||||||
Other assets |
232 | 268 | ||||||
Total long-term assets |
313 | 349 | ||||||
Total assets |
$ | 405 | $ | 434 | ||||
Current liabilities |
||||||||
Accounts payable |
$ | 53 | $ | 13 | ||||
Accrued expenses and other liabilities |
276 | 268 | ||||||
Environmental liabilities |
637 | 677 | ||||||
Total current liabilities |
966 | 958 | ||||||
Long-term liabilities |
||||||||
Closure liabilities |
116 | 113 | ||||||
Environmental liabilities |
248 | 248 | ||||||
Total long-term liabilities |
364 | 361 | ||||||
Total liabilities |
$ | 1,330 | $ | 1,319 |
(1) net of accumulated depreciation of $10,000 for each period presented.
The Company’s discontinued operations include a note receivable in the amount of approximately $375,000 recorded in May 2016 resulting from the sale of property at our Perma-Fix of Michigan, Inc. subsidiary. This note requires 60 equal monthly installment payments by the buyer of approximately $7,250 (which includes interest). At June 30, 2017, the outstanding amount on this note receivable totaled approximately $302,000, of which approximately $70,000 is included in “Current assets related to discontinued operations” and approximately $232,000 is included in “Other assets related to discontinued operations” in the accompanying Consolidated Balance Sheets.
10. |
Operating Segments |
In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity: (a) from which we may earn revenue and incur expenses; (2) whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and (3) for which discrete financial information is available.
Our reporting segments are defined as below:
TREATMENT SEGMENT reporting includes:
- |
nuclear, low-level radioactive, mixed, hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities; and |
- |
R&D activities to identify, develop and implement innovative waste processing techniques for problematic waste streams. |
SERVICES SEGMENT, which includes:
- |
On-site waste management services to commercial and government customers; |
- |
Technical services, which include: |
o |
professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering; |
o |
integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance; |
o |
global technical services providing consulting, engineering, project management, waste management, environmental, and decontamination and decommissioning field, technical, and management personnel and services to commercial and government customers; |
- |
Nuclear services, which include: |
o |
technology-based services including engineering, decontamination and decommissioning (“D&D”), specialty services and construction, logistics, transportation, processing and disposal; |
o |
remediation of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites. Such services capability includes: project investigation; radiological engineering; partial and total plant D&D; facility decontamination, dismantling, demolition, and planning; site restoration; site construction; logistics; transportation; and emergency response; and |
- |
A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) of health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation. |
MEDICAL SEGMENT reporting includes: R&D costs for the new medical isotope production technology from our majority-owned Polish subsidiary, PF Medical. The Medical Segment has not generated any revenue as it continues to be primarily in the R&D stage. All costs incurred for the Medical Segment are reflected within R&D in the accompanying Consolidated Statements of Operations and consist primarily of employee salaries and benefits, laboratory costs, third party fees, and other related costs associated with the development of this new technology.
Our reporting segments exclude our corporate headquarters and our discontinued operations (see Note 9 – “Discontinued Operations”) which do not generate revenues.
The table below presents certain financial information of our operating segments for the three and six months ended June 30, 2017 and 2016 (in thousands).
Segment Reporting for the Quarter Ended June 30, 2017 |
Treatment |
Services |
Medical |
Segments Total |
Corporate (1) |
Consolidated Total |
|||||||||||||||||||
Revenue from external customers |
$ | 9,630 | $ | 3,085 | — | $ | 12,715 | $ | — | $ | 12,715 | |||||||||||||
Intercompany revenues |
97 | 7 | — | 104 | — | — | ||||||||||||||||||
Gross profit |
2,174 | 180 | — | 2,354 | — | 2,354 | ||||||||||||||||||
Research and development |
62 | — | 550 | 612 | 7 | 619 | ||||||||||||||||||
Interest income |
— | — | — | — | 36 | 36 | ||||||||||||||||||
Interest expense |
(18 | ) | — | — | (18 | ) | (72 | ) | (90 | ) | ||||||||||||||
Interest expense-financing fees |
— | — | — | — | (9 | ) | (9 | ) | ||||||||||||||||
Depreciation and amortization |
988 | 135 | — | 1,123 | 10 | 1,133 | ||||||||||||||||||
Segment income (loss) before income taxes |
1,238 | (553 | ) | (550 | ) | 135 | (1,295 | ) | (1,160 | ) | ||||||||||||||
Income tax expense |
65 | — | — | 65 | 1 | 66 | ||||||||||||||||||
Segment income (loss) |
1,173 | (553 | ) | (550 | ) | 70 | (1,296 | ) | (1,226 | ) | ||||||||||||||
Expenditures for segment assets |
91 | 3 | — | 94 | — | 94 |
Segment Reporting for the Quarter Ended June 30, 2016 |
Treatment |
Services |
Medical |
Segments Total |
Corporate (1) |
Consolidated Total |
|||||||||||||||||||
Revenue from external customers |
$ | 7,985 | $ | 6,824 | — | $ | 14,809 | $ | — | $ | 14,809 | |||||||||||||
Intercompany revenues |
6 | 10 | — | 16 | — | — | ||||||||||||||||||
Gross profit |
582 | 1,234 | — | 1,816 | — | 1,816 | ||||||||||||||||||
Research and development |
120 | 7 | 416 | 543 | 11 | 554 | ||||||||||||||||||
Interest income |
2 | — | — | 2 | 29 | 31 | ||||||||||||||||||
Interest expense |
(14 | ) | — | — | (14 | ) | (94 | ) | (108 | ) | ||||||||||||||
Interest expense-financing fees |
— | — | — | — | (29 | ) | (29 | ) | ||||||||||||||||
Depreciation and amortization |
705 | 160 | — | 865 | 47 | 912 | ||||||||||||||||||
Segment (loss) income before income taxes |
(10,557 | ) | (2) | 1,046 | (416 | ) | (9,927 | ) | (1,374 | ) | (11,301 | ) | ||||||||||||
Income tax benefit |
(3,167 | ) | (2) | — | — | (3,167 | ) | — | (3,167 | ) | ||||||||||||||
Segment (loss) income |
(7,390 | ) | 1,046 | (416 | ) | (6,760 | ) | (1,374 | ) | (8,134 | ) | |||||||||||||
Expenditures for segment assets |
16 | 4 | — | 20 | — | 20 |
Segment Reporting for the Six Months Ended June 30, 2017 |
Treatment |
Services |
Medical |
Segments Total |
Corporate (1) |
Consolidated Total |
|||||||||||||||||||
Revenue from external customers |
$ | 19,665 | $ | 5,757 | — | $ | 25,422 | $ | — | $ | 25,422 | |||||||||||||
Intercompany revenues |
113 | 10 | — | 123 | — | — | ||||||||||||||||||
Gross profit |
4,861 | 212 | — | 5,073 | — | 5,073 | ||||||||||||||||||
Research and development |
243 | — | 750 | 993 | 15 | 1,008 | ||||||||||||||||||
Interest income |
— | — | — | — | 71 | 71 | ||||||||||||||||||
Interest expense |
(26 | ) | (1 | ) | — | (27 | ) | (162 | ) | (189 | ) | |||||||||||||
Interest expense-financing fees |
— | — | — | — | (18 | ) | (18 | ) | ||||||||||||||||
Depreciation and amortization |
1,997 | 271 | — | 2,268 | 20 | 2,288 | ||||||||||||||||||
Segment income (loss) before income taxes |
2,840 | (1,260 | ) | (750 | ) | 830 | (2,584 | ) | (1,754 | ) | ||||||||||||||
Income tax expense |
145 | — | — | 145 | 2 | 147 | ||||||||||||||||||
Segment income (loss) |
2,695 | (1,260 | ) | (750 | ) | 685 | (2,586 | ) | (1,901 | ) | ||||||||||||||
Expenditures for segment assets |
106 | 10 | — | 116 | — | 116 |
Segment Reporting for the Six Months Ended June 30, 2016 |
Treatment |
Services |
Medical |
Segments Total |
Corporate (1) |
Consolidated Total |
|||||||||||||||||||
Revenue from external customers |
$ | 15,189 | $ | 9,658 | — | $ | 24,847 | $ | — | $ | 24,847 | |||||||||||||
Intercompany revenues |
10 | 15 | — | 25 | — | — | ||||||||||||||||||
Gross profit |
444 | 1,406 | — | 1,850 | — | 1,850 | ||||||||||||||||||
Research and development |
226 | 33 | 854 | 1,113 | 15 | 1,128 | ||||||||||||||||||
Interest income |
2 | — | — | 2 | 45 | 47 | ||||||||||||||||||
Interest expense |
(16 | ) | — | — | (16 | ) | (260 | ) | (276 | ) | ||||||||||||||
Interest expense-financing fees |
— | — | — | — | (85 | ) | (85 | ) | ||||||||||||||||
Depreciation and amortization |
1,418 | 321 | — |