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)