Quarterly report pursuant to sections 13 or 15(d)

Operating Segments

Operating Segments

9 Months Ended

Sep. 30, 2011

9.	Operating Segments

In accordance to ASC 280, “Segment Reporting”, we define an operating segment as a business activity:

from which we may earn revenue and incur expenses;

whose operating results are regularly reviewed by the Chief Executive Officer to make decisions about resources to be allocated to the segment and assess its performance; and

for which discrete financial information is available.

We currently have two operating segments, which are defined as each business line that we operate. This however, excludes corporate headquarters, which does not generate revenue, and our discontinued operations, which includes all facilities within our Industrial Segment (See Note 8 – “Discontinued Operations and Divestitures”).

Our operating segments are defined as follows:

The Nuclear Segment provides treatment, storage, processing and disposal of nuclear, low-level radioactive, mixed (waste containing both hazardous and non-hazardous constituents), hazardous and non-hazardous waste and on-site waste management services through our four facilities: Perma-Fix of Florida, Inc. (“PFF”), Diversified Scientific Services, Inc. (“DSSI”), East Tennessee Materials and Energy Corporation (“M&EC”), and Perma-Fix of Northwest Richland, Inc. (“PFNWR”).

The Engineering Segment provides environmental engineering and regulatory compliance services through Schreiber, Yonley & Associates, Inc. (“SYA”) which includes oversight management of environmental restoration projects, air, soil, and water sampling, water and hazardous waste permitting, compliance reporting, emission reduction strategies, compliance auditing, and various compliance and training activities to industrial, education, healthcare, and service organizations, as well as, engineering and compliance support needed by our other facilities.

The table below presents certain financial information of our operating segments as of and for the three and nine months ended September 30, 2011 and 2010 (in thousands).

Segment Reporting for the Quarter Ended September 30, 2011

	Nuclear			Engineering		Segments Total		Corporate (2)			Consolidated Total
Revenue from external customers	$	32,086	(3)	$	701	$	32,787	$	-		$	32,787
Intercompany revenues		629			43		672		-			-
Gross profit		11,133			168		11,301		-			11,301
Interest income		-			-		-		14			14
Interest expense		5			1		6		93			99
Interest expense-financing fees		-			-		-		22			22
Depreciation and amortization		1,130			6		1,136		35			1,171
Segment profit (loss)		6,453			21		6,474		(2,053	)		4,421
Segment assets(1)		97,585			2,119		99,704		38,635	(4)		138,339
Expenditures for segment assets		325			-		325		22			347
Total long-term debt		171			13		184		5,378	(5)		5,562

Segment Reporting for the Quarter Ended September 30, 2010

	Nuclear			Engineering			Segments Total		Corporate (2)			Consolidated Total
Revenue from external customers	$	22,283	(3)	$	581		$	22,864	$	-		$	22,864
Intercompany revenues		893			44			937		-			-
Gross profit (negative gross profit)		2,631			(36	)		2,595		-			2,595
Interest income		-			-			-		15			15
Interest expense		24			1			25		132			157
Interest expense-financing fees		1			-			1		102			103
Depreciation and amortization		1,143			6			1,149		6			1,155
Segment profit (loss)		1,207			(173	)		1,034		(1,999	)		(965	)
Segment assets(1)		92,812			2,033			94,845		30,436	(4)		125,281
Expenditures for segment assets		363			15			378		3			381
Total long-term debt		1,064			19			1,083		11,090	(5)		12,173

Segment Reporting for the Nine Months Ended September 30, 2011

	Nuclear			Engineering			Segments Total		Corporate (2)			Consolidated Total
Revenue from external customers	$	83,391	(3)	$	1,924		$	85,315	$	-		$	85,315
Intercompany revenues		1,423			199			1,622		-			-
Gross profit		22,084			296			22,380		-			22,380
Interest income		-			-			-		40			40
Interest expense		69			2			71		387			458
Interest expense-financing fees		-			-			-		178			178
Depreciation and amortization		3,414			20			3,434		69			3,503
Segment profit (loss)		12,195			(37	)		12,158		(5,718	)		6,440
Segment assets(1)		97,585			2,119			99,704		38,635	(4)		138,339
Expenditures for segment assets		1,984			1			1,985		10			1,995
Total long-term debt		171			13			184		5,378	(5)		5,562

Segment Reporting for the Nine Months Ended September 30, 2010

	Nuclear			Engineering			Segments Total		Corporate (2)			Consolidated Total
Revenue from external customers	$	70,356	(3)	$	1,921		$	72,277	$	-		$	72,277
Intercompany revenues		2,461			391			2,852		-			-
Gross profit		14,541			178			14,719		-			14,719
Interest income		-			-			-		51			51
Interest expense		114			2			116		465			581
Interest expense-financing fees		1			-			1		307			308
Depreciation and amortization		3,337			21			3,358		16			3,374
Segment profit (loss)		7,650			(183	)		7,467		(5,742	)		1,725
Segment assets(1)		92,812			2,033			94,845		30,436	(4)		125,281
Expenditures for segment assets		1,427			16			1,443		23			1,466
Total long-term debt		1,064			19			1,083		11,090	(5)		12,173

(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 CH Plateau Remediation Company (“CHPRC”) revenue of $19,570,000 or 59.7% and $50,403,000 or 59.1% for the three and nine months ended September 30, 2011, respectively of our total consolidated revenue from continuing operations, as compared to $13,880,000 or 60.7% and $37,881,000 or 52.4% for the three and nine months ended September 30, 2010, respectively, of our total consolidated revenue from continuing operations. Our M&EC facility was awarded a subcontract by CHPRC, a general contractor to the Department of Energy (“DOE”), in the second quarter of 2008. We also have three waste processing contracts with CHPRC.

(4)	Amount includes assets from discontinued operations of $4,196,000 and $6,756,000 as of September 30, 2011 and 2010, respectively.

(5)

Net of debt discount of ($22,000) and ($200,000) as of September 30, 2011 and September 30, 2010, respectively, in connection with Warrants and Common Stock issued on May 8, 2009 in connection with a $3,000,000 promissory note entered into by the Company and Mr. William Lampson and Mr. Diehl Rettig on May 8, 2009. The promissory note and the Warrants were modified on April 18, 2011. See Note 6 - “Promissory Note and Installment Agreement” for additional information.