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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Form
10-Q
☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended |
|
June
30, 2021 |
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. |
|
001-11596 |
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) |
(Former
name, former address and former fiscal year, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act:
|
Title
of each class |
|
Trading
Symbol |
|
Name
of each exchange on which registered |
Common Stock, $.001 Par Value |
|
PESI |
|
NASDAQ
Capital Markets |
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 |
|
Outstanding
at July 30, 2021 |
Common
Stock, $.001 Par Value |
|
12,196,623
shares |
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
INDEX
PART
I - FINANCIAL INFORMATION
Item
1. – Financial Statements
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
Consolidated
Balance Sheets
| |
June
30, | | |
December
31, | |
| |
2021 | | |
2020 | |
(Amounts
in Thousands, Except for Share and Per Share Amounts) | |
(Unaudited) | | |
(Audited) | |
| |
| | |
| |
ASSETS | |
| | | |
| | |
Current
assets: | |
| | | |
| | |
Cash | |
$ | 7,312 | | |
$ | 7,924 | |
Accounts
receivable, net of allowance for doubtful accounts of $27 and $404, respectively | |
| 9,244 | | |
| 9,659 | |
Unbilled
receivables | |
| 7,332 | | |
| 14,453 | |
Inventories | |
| 701 | | |
| 610 | |
Prepaid
and other assets | |
| 2,926 | | |
| 3,967 | |
Current
assets related to discontinued operations | |
| 17 | | |
| 22 | |
Total
current assets | |
| 27,532 | | |
| 36,635 | |
| |
| | | |
| | |
Property
and equipment: | |
| | | |
| | |
Buildings
and land | |
| 20,123 | | |
| 20,139 | |
Equipment | |
| 22,132 | | |
| 22,090 | |
Vehicles | |
| 454 | | |
| 457 | |
Leasehold
improvements | |
| 23 | | |
| 23 | |
Office
furniture and equipment | |
| 1,425 | | |
| 1,413 | |
Construction-in-progress | |
| 2,227 | | |
| 1,569 | |
Total
property and equipment | |
| 46,384 | | |
| 45,691 | |
Less
accumulated depreciation | |
| (28,574 | ) | |
| (27,908 | ) |
Net
property and equipment | |
| 17,810 | | |
| 17,783 | |
| |
| | | |
| | |
Property
and equipment related to discontinued operations | |
| 81 | | |
| 81 | |
| |
| | | |
| | |
Operating
lease right-of-use assets | |
| 2,317 | | |
| 2,287 | |
| |
| | | |
| | |
Intangibles
and other long term assets: | |
| | | |
| | |
Permits | |
| 9,118 | | |
| 8,922 | |
Other
intangible assets - net | |
| 885 | | |
| 875 | |
Finite
risk sinking fund (restricted cash) | |
| 11,467 | | |
| 11,446 | |
Other
assets | |
| 849 | | |
| 890 | |
Total
assets | |
$ | 70,059 | | |
$ | 78,919 | |
The
accompanying notes are an integral part of these consolidated financial statements.
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
Consolidated
Balance Sheets, Continued
| |
June
30, | | |
December
31, | |
| |
2021 | | |
2020 | |
(Amounts
in Thousands, Except for Share and per Share Amounts) | |
(Unaudited) | | |
(Audited) | |
| |
| | |
| |
LIABILITIES
AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current
liabilities: | |
| | | |
| | |
Accounts
payable | |
$ | 11,511 | | |
$ | 15,382 | |
Accrued
expenses | |
| 5,637 | | |
| 6,381 | |
Disposal/transportation
accrual | |
| 1,055 | | |
| 1,220 | |
Deferred
revenue | |
| 3,932 | | |
| 4,614 | |
Accrued
closure costs - current | |
| 74 | | |
| 75 | |
Current
portion of long-term debt | |
| 404 | | |
| 3,595 | |
Current
portion of operating lease liabilities | |
| 275 | | |
| 273 | |
Current
portion of finance lease liabilities | |
| 433 | | |
| 525 | |
Current
liabilities related to discontinued operations | |
| 817 | | |
| 898 | |
Total
current liabilities | |
| 24,138 | | |
| 32,963 | |
| |
| | | |
| | |
Accrued
closure costs | |
| 6,465 | | |
| 6,290 | |
Deferred
tax liabilities | |
| 474 | | |
| 471 | |
Long-term
debt, less current portion | |
| 819 | | |
| 3,134 | |
Long-term
operating lease liabilities, less current portion | |
| 2,119 | | |
| 2,070 | |
Long-term
finance lease liabilities, less current portion | |
| 555 | | |
| 662 | |
Other
long-term liabilities | |
| 626 | | |
| 626 | |
Long-term
liabilities related to discontinued operations | |
| 256 | | |
| 252 | |
Total
long-term liabilities | |
| 11,314 | | |
| 13,505 | |
| |
| | | |
| | |
Total
liabilities | |
| 35,452 | | |
| 46,468 | |
| |
| | | |
| | |
Commitments
and Contingencies (Note 9) | |
| | | |
| | |
| |
| | | |
| | |
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;12,188,256 and 12,161,539 shares issued, respectively;12,180,614 and 12,153,897
shares outstanding, respectively | |
| 12 | | |
| 12 | |
Additional
paid-in capital | |
| 109,206 | | |
| 108,931 | |
Accumulated
deficit | |
| (72,555 | ) | |
| (74,455 | ) |
Accumulated
other comprehensive loss | |
| (167 | ) | |
| (207 | ) |
Less
Common Stock in treasury, at cost; 7,642 shares | |
| (88 | ) | |
| (88 | ) |
Total
Perma-Fix Environmental Services, Inc. stockholders’ equity | |
| 36,408 | | |
| 34,193 | |
Non-controlling
interest | |
| (1,801 | ) | |
| (1,742 | ) |
Total
stockholders’ equity | |
| 34,607 | | |
| 32,451 | |
| |
| | | |
| | |
Total
liabilities and stockholders’ equity | |
$ | 70,059 | | |
$ | 78,919 | |
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 | | |
Six
Months Ended | |
| |
June
30, | | |
June
30, | |
(Amounts
in Thousands, Except for Per Share Amounts) | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| |
| | |
| | |
| | |
| |
Net
revenues | |
$ | 16,145 | | |
$ | 22,047 | | |
$ | 39,278 | | |
$ | 46,907 | |
Cost
of goods sold | |
| 15,179 | | |
| 18,737 | | |
| 35,956 | | |
| 38,957 | |
Gross
profit | |
| 966 | | |
| 3,310 | | |
| 3,322 | | |
| 7,950 | |
| |
| | | |
| | | |
| | | |
| | |
Selling,
general and administrative expenses | |
| 2,997 | | |
| 2,700 | | |
| 6,202 | | |
| 5,627 | |
Research
and development | |
| 144 | | |
| 209 | | |
| 295 | | |
| 441 | |
(Gain)
loss on disposal of property and equipment | |
| — | | |
| (4) | | |
| — | | |
| 27 | |
(Loss)
income from operations | |
| (2,175 | ) | |
| 405 | | |
| (3,175 | ) | |
| 1,855 | |
| |
| | | |
| | | |
| | | |
| | |
Other
income (expense): | |
| | | |
| | | |
| | | |
| | |
Interest
income | |
| 2 | | |
| 28 | | |
| 21 | | |
| 84 | |
Interest
expense | |
| (65 | ) | |
| (99 | ) | |
| (132 | ) | |
| (219 | ) |
Interest
expense-financing fees | |
| (9 | ) | |
| (60 | ) | |
| (17 | ) | |
| (129 | ) |
Other | |
| — | |
| | 4 | |
| | 1 | |
| | 9 |
Gain
(loss) on extinguishment of debt | |
| 5,381 | | |
| (27 | ) | |
| 5,381 | | |
| (27 | ) |
Income
from continuing operations before taxes | |
| 3,134 | | |
| 251 | | |
| 2,079 | | |
| 1,573 | |
Income
tax expense (benefit) | |
| 13 | | |
| (9 | ) | |
| (4 | ) | |
| 5 | |
Income
from continuing operations, net of taxes | |
| 3,121 | | |
| 260 | | |
| 2,083 | | |
| 1,568 | |
| |
| | | |
| | | |
| | | |
| | |
Loss
from discontinued operations (net of taxes of $0) | |
| (127 | ) | |
| (85 | ) | |
| (242 | ) | |
| (199 | ) |
Net
income | |
| 2,994 | | |
| 175 | | |
| 1,841 | | |
| 1,369 | |
| |
| | | |
| | | |
| | | |
| | |
Net
loss attributable to non-controlling interest | |
| (29 | ) | |
| (29 | ) | |
| (59 | ) | |
| (55 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net
income attributable to Perma-Fix Environmental Services,
Inc. common stockholders | |
$ | 3,023 | | |
$ | 204 | | |
$ | 1,900 | | |
$ | 1,424 | |
| |
| | | |
| | | |
| | | |
| | |
Net
income (loss) per common share attributable to Perma-Fix Environmental
Services, Inc. stockholders - basic: | |
| | | |
| | | |
| | | |
| | |
Continuing
operations | |
$ | .26 | | |
$ | .02 | | |
$ | .18 | | |
$ | .13 | |
Discontinued
operations | |
| (.01 | ) | |
| — | | |
| (.02 | ) | |
| (.01 | ) |
Net
income per common share | |
$ | .25 | | |
$ | .02 | | |
$ | .16 | | |
$ | .12 | |
| |
| | | |
| | | |
| | | |
| | |
Net
income (loss) per common share attributable to Perma-Fix Environmental Services, Inc. stockholders - diluted: | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Continuing
operations | |
$ | .25 | | |
$ | .02 | | |
$ | .17 | | |
$ | .13 | |
Discontinued
operations | |
| (.01 | ) | |
| — | | |
| (.02 | ) | |
| (.01) | |
Net
income per common share | |
$ | .24 | | |
$ | .02 | | |
$ | .15 | | |
$ | .12 | |
| |
| | | |
| | | |
| | | |
| | |
Number
of common shares used in computing net income per share: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 12,180 | | |
| 12,135 | | |
| 12,173 | | |
| 12,129 | |
Diluted | |
| 12,440 | | |
| 12,286 | | |
| 12,420 | | |
| 12,320 | |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
Consolidated
Statements of Comprehensive Income
(Unaudited)
| |
| | | |
| | | |
| | | |
| | |
| |
Three
Months Ended | | |
Six
Months Ended | |
| |
June
30, | | |
June
30, | |
(Amounts
in Thousands) | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| |
| | |
| | |
| | |
| |
Net
income | |
$ | 2,994 | | |
$ | 175 | | |
$ | 1,841 | | |
$ | 1,369 | |
Other
comprehensive income (loss): | |
| | | |
| | | |
| | | |
| | |
Foreign
currency translation gain (loss) | |
| 20 | | |
| 28 | | |
| 40 | | |
| (51 | ) |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive
income | |
| 3,014 | | |
| 203 | | |
| 1,881 | | |
| 1,318 | |
Comprehensive
loss attributable to non-controlling interest |
|
|
(29 |
) |
|
|
(29 |
) |
|
|
(59 |
) |
|
|
(55 |
) |
Comprehensive
income attributable to Perma-Fix Environmental
Services, Inc. stockholders | |
$ | 3,043 | | |
$ | 232 | | |
$ | 1,940 | | |
$ | 1,373 | |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX
ENVIRONMENTAL SERVICES, INC
Consolidated
Statement of Stockholders’ Equity
(Unaudited)
(Amounts
in thousands, except for share amounts)
| |
| | | |
| | | |
| | |
|
| | | |
| | | |
| | | |
| | | |
| | |
| |
Common
Stock | | |
Additional
Paid-In | |
|
Common
Stock Held In | | |
Accumulated
Other Comprehensive | | |
Non-controlling
Interest in | | |
Accumulated | | |
Total
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | |
|
Treasury | | |
Loss | | |
Subsidiary | | |
Deficit | | |
Equity | |
| |
| | |
| | |
| |
|
| | |
| | |
| | |
| | |
| |
Balance
at December 31, 2020 | |
| 12,161,539 | | |
$ | 12 | | | $ | 108,931 | |
|
$ | (88 | ) | |
$ | (207 | ) | |
$ | (1,742 | ) | |
$ | (74,455 | ) | |
$ | 32,451 | |
Net
loss | |
| — | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| (30 | ) | |
| (1,123 | ) | |
| (1,153 | ) |
Net
Income (loss) | |
| — | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| (30 | ) | |
| (1,123 | ) | |
| (1,153 | ) |
Foreign
currency translation | |
| — | | |
| — | | |
| — | |
|
| — | | |
| 20 | | |
| — | | |
| — | | |
| 20 | |
Issuance
of Common Stock for services | |
| | |
| — | | |
| 79 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 79 | |
Stock-Based
Compensation | |
| — | | |
| — | | |
| 45 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 45 | |
Balance
at March 31, 2021 | |
| 12,173,376 | | |
$ | 12 | | |
$ | 109,055 | |
|
$ | (88 | ) | |
$ | (187 | ) | |
$ | (1,772 | ) | |
$ | (75,578 | ) | |
$ | 31,442 | |
Net
Income (loss) | |
| — | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| (29 | ) | |
| 3,023 | | |
| 2,994 | |
Foreign
currency translation | |
| — | | |
| — | | |
| — | |
|
| — | | |
| 20 | | |
| — | | |
| — | | |
| 20 | |
Issuance
of Common Stock upon exercise of
options | |
| 290 | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Issuance
of Common Stock for services | |
| 14,590 | | |
| — | | |
| 109 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 109 | |
Stock-Based
Compensation | |
| — | | |
| — | | |
| 42 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 42 | |
Balance
at June 30, 2021 | |
| 12,188,256 | | |
$ | 12 | | |
$ | 109,206 | |
|
$ | (88 | ) | |
$ | (167 | ) | |
$ | (1,801 | ) | |
$ | (72,555 | ) | |
$ | 34,607 | |
| |
| | | |
| | | |
| | |
|
| | | |
| | | |
| | | |
| | | |
| | |
Balance
at December 31, 2019 | |
| 12,123,520 | | |
$ | 12 | | |
$ | 108,457 | |
|
$ | (88 | ) | |
$ | (211 | ) | |
$ | (1,619 | ) | |
$ | (77,315 | ) | |
$ | 29,236 | |
Net
Income (loss) | |
| — | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| (26 | ) | |
| 1,220 | | |
| 1,194 | |
Foreign
currency translation | |
| — | | |
| — | | |
| — | |
|
| — | | |
| (79 | ) | |
| — | | |
| — | | |
| (79 | ) |
Issuance
of Common Stock upon exercise of
options | |
| 3,643 | | |
| — | | |
| 6 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 6 | |
Issuance
of Common Stock for services | |
| 5,128 | | |
| — | | |
| 48 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 48 | |
Stock-Based
Compensation | |
| — | | |
| — | | |
| 44 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 44 | |
Balance
at March 31, 2020 | |
| 12,132,291 | | |
$ | 12 | | |
$ | 108,555 | |
|
$ | (88 | ) | |
$ | (290 | ) | |
$ | (1,645 | ) | |
$ | (76,095 | ) | |
$ | 30,449 | |
Net
Income (loss) | |
| — | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| (29 | ) | |
| 204 | | |
| 175 | |
Foreign
currency translation | |
| — | | |
| — | | |
| — | |
|
| — | | |
| 28 | | |
| — | | |
| — | | |
| 28 | |
Issuance
of Common Stock upon exercise of
options | |
| 241 | | |
| — | | |
| — | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Issuance
of Common Stock for services | |
| 10,239 | | |
| — | | |
| 56 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 56 | |
Stock-Based
Compensation | |
| — | | |
| — | | |
| 48 | |
|
| — | | |
| — | | |
| — | | |
| — | | |
| 48 | |
Balance
at June 30, 2020 | |
| 12,142,771 | | |
$ | 12 | | |
$ | 108,659 | |
|
$ | (88 | ) | |
$ | (262 | ) | |
$ | (1,674 | ) | |
$ | (75,891 | ) | |
$ | 30,756 | |
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) | |
2021 | | |
2020 | |
Cash
flows from operating activities: | |
| | | |
| | |
Net
income | |
$ | 1,841 | | |
$ | 1,369 | |
Less:
loss from discontinued operations, net of taxes of $0 | |
| (242 | ) | |
| (199 | ) |
| |
| | | |
| | |
Income
from continuing operations, net of taxes | |
| 2,083 | | |
| 1,568 | |
Adjustments
to reconcile income from continuing operations to cash provided by operating activities: | |
| | | |
| | |
Depreciation
and amortization | |
| 799 | | |
| 711 | |
Interest
on finance lease with purchase option | |
| 4 | | |
| 4 | |
(Gain)
loss on extinguishment of debt | |
| (5,381 | ) | |
| 27 | |
Amortization
of debt discount/debt issuance costs | |
| 17 | | |
| 129 | |
Deferred
tax expense | |
| 3 | | |
| 5 | |
Recovery
of bad debt reserves | |
| (17 | ) | |
| (107 | ) |
Loss
on disposal of property and equipment | |
| — | | |
| 27 | |
Issuance
of common stock for services | |
| 188 | | |
| 104 | |
Stock-based
compensation | |
| 87 | | |
| 92 | |
Changes
in operating assets and liabilities of continuing operations | |
| | | |
| | |
Accounts
receivable | |
| 432 | | |
| 2,479 | |
Unbilled
receivables | |
| 7,121 | | |
| (3,085 | ) |
Prepaid
expenses, inventories and other assets | |
| 1,076 | | |
| 714 | |
Accounts
payable, accrued expenses and unearned revenue | |
| (5,609 | ) | |
| 289 | |
Cash
provided by continuing operations | |
| 803 | | |
| 2,957 | |
Cash
used in discontinued operations | |
| (315 | ) | |
| (259 | ) |
Cash
provided by operating activities | |
| 488 | | |
| 2,698 | |
| |
| | | |
| | |
Cash
flows from investing activities: | |
| | | |
| | |
Purchases
of property and equipment | |
| (650 | ) | |
| (1,366 | ) |
Proceeds
from sale of property and equipment | |
| 1 | | |
| 4 | |
Cash
used in investing activities of continuing operations | |
| (649 | ) | |
| (1,362 | ) |
Cash
provided by investing activities of dicontinued operations | |
| — | | |
| 13 | |
Cash
used in investing activities | |
| (649 | ) | |
| (1,349 | ) |
| |
| | | |
| | |
Cash
flows from financing activities: | |
| | | |
| | |
Repayments
of revolving credit borrowings | |
| (41,834 | ) | |
| (47,058 | ) |
Borrowing
on revolving credit | |
| 41,834 | | |
| 46,737 | |
Proceeds
from issuance of long-term debt | |
| — | | |
| 5,666 | |
Principal
repayments of finance lease liabilities | |
| (205 | ) | |
| (229 | ) |
Principal
repayments of long term debt | |
| (219 | ) | |
| (1,045 | ) |
Payment
of debt issuance costs | |
| (15 | ) | |
| (85 | ) |
Proceeds
from issuance of common stock upon exercise of options | |
| — | | |
| 6 | |
Cash
(used in) provided by financing activities of continuing operations | |
| (439 | ) | |
| 3,992 | |
| |
| | | |
| | |
Effect
of exchange rate changes on cash | |
| 9 | | |
| (18 | ) |
| |
| | | |
| | |
(Decrease)
increase in cash and finite risk sinking fund (restricted cash) | |
| (591 | ) | |
| 5,323 | |
Cash
and finite risk sinking fund (restricted cash) at beginning of period | |
| 19,370 | | |
| 11,697 | |
Cash
and finite risk sinking fund (restricted cash) at end of period | |
$ | 18,779 | | |
$ | 17,020 | |
| |
| | | |
| | |
Supplemental
disclosure: | |
| | | |
| | |
Interest
paid | |
$ | 106 | | |
$ | 207 | |
Income
taxes paid | |
| 15 | | |
| 30 | |
Non-cash
financing activities: | |
| | | |
| | |
Equipment
purchase subject to finance lease | |
| — | | |
| 132 | |
Equipment
purchase subject to finance | |
| 29 | | |
| — | |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
Notes
to Consolidated Financial Statements
June
30, 2021
(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, 2020.
1.
Basis of Presentation
The
consolidated 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
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, 2021 are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2021.
The
Company suggests 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, 2020.
The
consolidated financial statements include our accounts, those of our wholly-owned subsidiaries, and our majority-owned Polish subsidiary,
Perma-Fix Medical. Additionally, the Company’s financial statements include the account of a variable interest entity (“VIE”),
Perma-Fix ERRG for which we are the primary beneficiary (See “Note 13 - VIE” for a discussion of this VIE).
2.
Summary of Significant Accounting Policies
Our
accounting policies are as set forth in the notes to the December 31, 2020 consolidated financial statements referred to above.
Recently
Adopted Accounting Standards
In
December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects
related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies
and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of ASU No. 2019-12 by the Company
effective January 1, 2021 did not have a material impact on the Company’s financial statements.
In
January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint
Ventures (Topic 323), and Derivatives and Hedging (Topic 815), clarifying the Interactions between Topic 321, Topic 323, and Topic 815.”
This guidance addresses accounting for
the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity
method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for fiscal
years and interim periods within those fiscal years beginning after December 15, 2020. Early adoption is permitted. The adoption of ASU
No. 2020-01 by the Company effective January 1, 2021 did not have a material impact on the Company’s financial statements.
In
October 2020, the FASB issued ASU No 2020-10, “Codification Improvements.” ASU 2020-10 updates various codification topics
by clarifying or improving disclosure requirements. ASU 2020-10 is effective for public entities for fiscal years beginning after December
15, 2020, with early adoption permitted. The adoption of ASU No. 2020-01 by the Company effective January 1, 2021 did not have a material
impact on the Company’s financial statements or disclosures.
Recently
Issued Accounting Standards – Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, “Credit Losses
(Topic 326) - Measurement of Credit Losses on Financial Instruments,” and various subsequent amendments to the initial guidance
(collectively, “Topic 326”). Topic 326 introduces an approach, based on expected losses, to estimate credit losses on certain
types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating
credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and
certain other instruments, including trade and other receivables and loans. Entities are required to apply the standard’s provisions
as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.
In November 2019, FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic
815), and Leases (Topic 842),” which defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting
companies as defined by the Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal
years. These ASUs are effective January 1, 2023 for the Company as a smaller reporting company (“SRC”). Under new guidance
issued by the Commission in March 2020, the Company will continue to qualify as a smaller reporting company but will also be an accelerated
filer for all filings with the Commission after January 1, 2022. The Company is currently evaluating the impact of these ASU on its consolidated
financial statements.
In
August 2020, the FASB issued ASU No. 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments
by removing major separation models and removing certain settlement condition qualifiers for the derivatives scope exception for contracts
in an entity’s own equity, and simplifies the related diluted net income per share calculation for both Subtopics. ASU 2020-06
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, for the Company as a
smaller reporting company. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including
interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its consolidated financial statements
and disclosures.
In
May 2021, the FASB issued ASU No. 2021-04, “Earnings Per Share (Topic 206), Debt-Modifications and Extinguishments (Subtopic 470-50),
Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s
Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging
Issues Task Force).” ASU 2021-04 addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified
written call options. This ASU is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods
within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated
financial statements.
3.
Revenue
Disaggregation
of Revenue
In
general, the Company’s business segmentation is aligned according to the nature and economic characteristics of our services and
provides meaningful disaggregation of each business segment’s results of operations. The nature of the Company’s performance
obligations within our Treatment and Services Segments result in the recognition of our revenue primarily over time. The following tables
present further disaggregation of our revenues by different categories for our Services and Treatment Segments:
Schedule of Disaggregation of Revenue
Revenue
by Contract Type | |
| | |
| | |
| | |
| | |
| | |
| |
(In
thousands) | |
Three
Months Ended | | |
Three
Months Ended | |
| |
June
30, 2021 | | |
June
30, 2020 | |
| |
Treatment | | |
Services | | |
Total | | |
Treatment | | |
Services | | |
Total | |
Fixed
price | |
$ | 7,706 | | |
$ | 1,482 | | |
$ | 9,188 | | |
$ | 7,840 | | |
$ | 2,329 | | |
$ | 10,169 | |
Time
and materials | |
| — | | |
| 6,957 | | |
| 6,957 | | |
| — | | |
| 11,878 | | |
| 11,878 | |
Total | |
$ | 7,706 | | |
$ | 8,439 | | |
$ | 16,145 | | |
$ | 7,840 | | |
$ | 14,207 | | |
$ | 22,047 | |
Revenue
by Contract Type | |
| | |
| | |
| | |
| | |
| |
(In
thousands) | |
Six
Months Ended | | |
| | |
Six
Months Ended | | |
| |
| |
June
30, 2021 | | |
| | |
June
30, 2020 | | |
| |
| |
Treatment | | |
Services | | |
Total | | |
Treatment | | |
Services | | |
Total | |
Fixed
price | |
$ | 15,201 | | |
$ | 4,063 | | |
$ | 19,264 | | |
$ | 17,403 | | |
$ | 3,721 | | |
$ | 21,124 | |
Time
and materials | |
| — | | |
| 20,014 | | |
| 20,014 | | |
| — | | |
| 25,783 | | |
| 25,783 | |
Total | |
$ | 15,201 | | |
$ | 24,077 | | |
$ | 39,278 | | |
$ | 17,403 | | |
$ | 29,504 | | |
$ | 46,907 | |
Revenue
by generator | |
| | |
| | |
| | |
| | |
| | |
| |
(In
thousands) | |
Three
Months Ended | | |
| | |
Three
Months Ended | | |
| |
| |
June
30, 2021 | | |
| | |
June
30, 2020 | | |
| |
| |
Treatment | | |
Services | | |
Total | | |
Treatment | | |
Services | | |
Total | |
Domestic
government | |
$ | 5,639 | | |
$ | 6,764 | | |
$ | 12,403 | | |
$ | 6,055 | | |
$ | 12,791 | | |
$ | 18,846 | |
Domestic
commercial | |
| 2,060 | | |
| 391 | | |
| 2,451 | | |
| 1,785 | | |
| 431 | | |
| 2,216 | |
Foreign
government | |
| 7 | | |
| 1,261 | | |
| 1,268 | | |
| — | | |
| 965 | | |
| 965 | |
Foreign
commercial | |