Perma-Fix Reports Third Quarter 2006 Financial Results; 6th Consecutive Quarter of Profitability
ATLANTA, Nov. 1 /PRNewswire-FirstCall/ -- Perma-Fix Environmental Services, Inc. (Nasdaq: PESI; BSE: PESI; Germany: PES.BE) today announced financial results for the third quarter and nine months ended September 30, 2006.
Dr. Louis F. Centofanti, Chairman and Chief Executive Officer, stated, "Revenue within the Nuclear segment was relatively flat compared to last year, as Department of Energy spending was spread out more evenly during the year, and less waste was received during the third quarter due to redirected government spending. However, we do expect growth within the segment to resume on a year-over-year basis, as we begin the government's new fiscal year. In addition, we have begun treating higher-level mixed wastes and are near completion building a new bay at our Oak Ridge facility, which will allow us to treat new special and classified wastes. We also received a new permit for our Gainesville facility, which will allow us to treat a broader level of specialty pharmaceutical, mixed and hazardous waste."
Dr. Centofanti continued, "Within the Industrial segment we remain focused on improving margins, by moving away from lower margin waste streams and reducing operating expenses; however, we continue to be impacted by several unprofitable contracts, one of which we expect to expire before year-end, as well as ongoing legal expenses at our Dayton facility. We also recorded unusual expenses during the third quarter related to the relocation of our corporate headquarters."
Dr. Centofanti concluded, "Going forward, we remain encouraged by the progress of our Industrial segment and the continued strong cash flow in our Nuclear segment. In addition, the recently announced letter-of-intent to acquire PEcoS presents a tremendous opportunity, should the acquisition be completed, to be more involved in treatment of the large quantities of radioactive waste at Hanford. We expect the Hanford site will be the most expensive of all the DOE's nuclear weapons facilities to remediate, and it represents a significant growth opportunity treating both low-level mixed waste as well as higher level radioactive wastes."
Financial Results
Revenues for the third quarter of 2006 were $21.2 million versus $22.8 million for the same period last year. Revenue for the Nuclear segment was $11.0 million versus $11.3 million for the third quarter of 2005. Revenue for the Industrial segment was $9.2 million versus $10.9 million in the same period last year, reflecting the Company's efforts to replace lower margin contracts.
Income from operations for the third quarter was $711,000 versus $2.1 million for the same period last year. The increase in selling, general and administrative expenses reflected increased legal expenses related to the Company's Dayton facility, as well as severance and relocation expenses related to the new corporate headquarters. Net income applicable to common stock for the third quarter of 2006 was $330,000, or $0.01 per share, versus $1,976,000 or $0.05 per share, for the same period last year. Net income for the 2005 period included a gain of $860,000 from discontinued operations at the Detroit facility, which was closed in the third quarter of 2004.
Revenues for the nine months ended September 30, 2006, were $65.9 million versus $69.4 million for the same period last year. Revenue for the Nuclear segment was $36.3 million versus $36.0 million for the nine months ended September 30, 2005. Revenue for the Industrial segment was $26.9 million versus $31.3 million for the same period last year.
Income from operations for the nine months ended September 30, 2006, was $3.7 million versus $5.0 million for the same period last year. Net income applicable to common stock for the nine months ended September 30, 2006, was $2.8 million, or $0.06 per share, versus net income applicable to common stock of $3.0 million or $0.08 per share, for the same period last year. Net income applicable to common stock for the nine months ended September 30, 2005, included a gain of $322,000 from discontinued operations.
The Company's EBITDA was $1.8 million during the quarter ended September 30, 2006, as compared to $3.7 million for the same period of 2005. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of EBITDA is relevant and useful because it helps improve the investors' ability to understand the Company's operating performance. The Company's management utilizes EBITDA as a means to measure performance. The Company's measurements of EBITDA may not be comparable to similar titled measures reported by other companies. The table below reconciles EBITDA, a non-GAAP measure, to net income for the three and nine months ended September 30, 2006 and 2005.
Quarter Ended Nine Months Ended
Sept. 30, Sept. 30,
(In thousands) 2006 2005 2006 2005
Net Income, as reported $330 $1,976 $2,834 $3,042
Adjustments:
Depreciation & Amortization 1,231 1,201 3,644 3,604
Interest Income (100) (5) (195) (7)
Interest Expense 349 431 1,126 1,321
Interest Expense
- Financing Fees 48 48 145 269
Income Tax Expense (26) 41 152 324
EBITDA $1,832 $3,692 $7,706 $8,553
The tables below present certain financial information for the business segments, excluding allocation of corporate expenses:
Quarter Ended Quarter Ended
September 30, 2006 September 30, 2005
Industrial Nuclear Engineering Industrial Nuclear Engineering
(In thousands)
Net
revenues $9,178 $11,023 $1,065 $10,884 $11,259 $684
Gross
profit 1,960 4,127 241 2,373 4,162 185
Segment
profit(loss) (355) 2,213 95 470 2,045 61
Nine Months Ended Nine Months Ended
September 30, 2006 September 30, 2005
Industrial Nuclear Engineering Industrial Nuclear Engineering
(In thousands)
Net
revenues $26,874 $36,287 $2,737 $31,293 $35,963 $2,145
Gross
profit 5,956 14,663 692 5,178 13,951 483
Segment
profit(loss) (1,562) 8,451 246 (638) 7,663 134
About Perma-Fix Environmental Services
Perma-Fix Environmental Services, Inc. is a national environmental services company, providing unique mixed waste and industrial waste management services. The Company has increased its focus on the nuclear services segment, which provides radioactive and mixed waste treatment services to hospitals, research laboratories and institutions, numerous federal agencies including DOE and the U.S. Department of Defense and nuclear utilities. The industrial services segment provides hazardous and non-hazardous waste treatment services for a diverse group of customers including Fortune 500 companies, numerous federal, state and local agencies and thousands of smaller clients. The Company operates nine major waste treatment facilities across the country.
This press release contains "forward-looking statements" which are based largely on the Company's expectations and are subject to various business risks and uncertainties, certain of which are beyond the Company's control. Forward-looking statements include, but are not limited to, the Nuclear segment's expectation to continue its annual growth on a yearly basis; completion building a new bay to treat special waste; improving margins within our Industrial segment; and completion of the proposed acquisition of PEcoS which, if completed, will allow us to be involved in the remediation of the DOE's Hanford site and represent a significant growth opportunity for us. These forward-looking statements are intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. While the Company believes the expectations reflected in this news release are reasonable, it can give no assurance such expectations will prove to be correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this release, including, without limitation, future economic conditions; industry conditions; competitive pressures; and our ability to apply and market our technologies; that neither the federal government nor any other party to a subcontract involving the federal government terminates or renegotiates any material contract granted to us prior to expiration of the term of the contract, as such contracts are generally terminable or renegotiable on 30 day notice, at the government's option; or the government or such other party to a contract granted to us fails to abide by or comply with the contract or to deliver waste as anticipated under the contract; the completion of the proposed acquisition of PEcoS, which completion is subject to numerous conditions precedents; and the additional factors referred to under "Special Note Regarding Forward-Looking Statements" of our 2005 Form 10-K and the Forward- Looking Statements discussed in our Form 10-Q for the first quarter of 2006. The Company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that bear upon forward-looking statements.
Please visit us on the World Wide Web at http://www.perma-fix.com.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
(Amounts in Thousands,
Except for Per Share
Amounts)
Net revenues $21,266 $22,826 $65,899 $69,400
Cost of goods sold 14,938 16,106 44,589 49,791
Gross profit 6,328 6,720 21,310 19,611
Selling, general and
administrative expenses 5,621 4,643 17,654 14,984
Loss (gain) on disposal
of property and equipment (4) 4 (3) (333)
Income from operations 711 2,073 3,659 4,958
Other income (expense):
Interest income 100 4 195 6
Interest expense (331) (382) (1074) (1176)
Interest expense
-financing fees (48) (48) (145) (269)
Other 3 (68) (114) (102)
Income from continuing
operations before taxes 435 1,579 2,521 3,417
Income tax expense (26) 324 152 606
Income from continuing
operations 461 1,255 2,369 2,811
Income (loss) from
discontinued operations (131) 751 465 322
Net income 330 2,006 2,834 3,133
Preferred Stock dividends - 30 - 91
Net income applicable to
Common Stock $330 $1,976 $2,834 $3,042
Net income per common
share - basic
Continuing operations $.01 $.03 $.05 $.07
Discontinued operations - .02 .01 .01
Net income per common
share $.01 $.05 $.06 $.08
Net income per common
share - diluted
Continuing operations $.01 $.03 $.05 $.07
Discontinued operations - .02 .01 .01
Net income per common
share $.01 $.05 $.06 $.08
Number of shares and
potential common shares
used in net income per
common share:
Basic 50,541 42,055 46,851 41,881
Diluted 51,426 44,152 47,414 43,138
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands,
Except for Share Amounts) September 30, December 31,
2006 2005
(Unaudited)
ASSETS
Current assets
Cash $2,549 $94
Restricted cash 65 511
Accounts receivable, net of allowance for
doubtful accounts of $520 and $512 13,591 16,609
Unbilled receivables 17,226 11,948
Prepaid expenses and other 4,720 3,656
Current assets of discontinued operations,
net of allowance for doubtful accounts
of $0 and $90 - 60
Total current assets 38,151 32,878
Net property and equipment 44,913 44,480
Net Property and equipment of
discontinued operations 706 806
Permits 13,498 13,188
Goodwill 1,330 1,330
Finite Risk Sinking Fund 4,471 3,339
Other assets 1,923 2,504
Total assets $104,992 $98,525
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,674 $6,053
Accrued expenses and other 15,177 17,603
Current liabilities of discontinued operations 758 628
Current portion of long-term debt 2,445 2,678
Total current liabilities 23,054 26,962
Other long-term liabilities 10,146 9,279
Long-term liabilities of discontinued operations 1,422 3,149
Long-term debt, less current portion 6,759 10,697
Total long-term liabilities 18,327 23,125
Total liabilities 41,381 50,087
Commitments and Contingencies - -
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 1,285 1,285
Stockholders' equity:
Common Stock, $.001 par value; 75,000,000 shares
authorized, 52,019,617 and 45,813,916 shares issued,
including 988,000 shares retired in September 2006
and held as treasury stock as of December 31, 2005,
respectively 53 46
Additional paid-in capital 92,746 82,180
Stock Subscription Receivable (97)
Accumulated deficit (30,376) (33,211)
62,326 49,015
Less Common Stock in treasury at cost;
988,000 shares 0 (1,862)
Total stockholders' equity 62,326 47,153
Total liabilities and stockholders' equity $104,992 $98,525
SOURCE Perma-Fix Environmental Services, Inc.
CONTACT: Dr. Louis F. Centofanti, Chairman and CEO of Perma-Fix
Environmental Services, Inc., +1-770-587-5155; or David K. Waldman, US
Investor Relations of Crescendo Communications, LLC, +1-212-671-1020 x101, or
Herbert Strauss, European Investor Relations, +43-316-296-316,
herbert@eu-ir.com, both for Perma-Fix Environmental Services, Inc.
/Web site: http://www.perma-fix.com /
(PESI)
Released November 1, 2006