Perma-Fix Announces 43% Increase In Net Income For 2003

ATLANTA, March 2 /PRNewswire-FirstCall/ -- Perma-Fix Environmental Services, Inc. (Nasdaq: PESI; BSE) (Germany: PES.BE) today announced financial results for the fourth quarter and fiscal 2003. Revenues for the quarter ended December 31, 2003, totaled $20.0 million, compared to $20.2 million for the same period in 2002. Net income for the quarter was $586,000 or $.02 per share compared to net loss of $199,000 or $.01 per share for the same period in 2002.

Results for the quarter reflect an 8.8% increase in revenue for the Industrial Segment, which was largely attributable to $1.9 million recognized on the Company's Newport Hydrolysate Project with the Army, which was completed in 2003. Revenue for the Nuclear Segment declined 10.4% due to continued timing irregularities of revenues within this segment.

For the twelve months ended December 31, 2003, revenues increased by approximately 1.8% to a record $84.9 million, compared to revenues of $83.4 million in 2002. For the twelve months ended December 31, 2003, net income totaled $2.9 million or $.08 per share, compared to net income of $2.0 million or $.06 per share in 2002.

Results for the year reflect a 17.6% increase in revenue for the Industrial Segment, which was largely attributable to $4.9 million recognized on the Company's Newport Hydrolysate Project with the Army. Revenue for the Nuclear Segment declined 11.5% due to the Department of Energy lockdowns related to the terrorism alerts in the first half of the year.

Dr. Louis F. Centofanti, Chairman and CEO, commented, "We are quite pleased with the 43.3% increase in profitability, continued reduction in our long-term debt, and improved working capital position. We achieved these results despite the Department of Energy (DOE) lockdowns and resulting impact to our Nuclear Segment from the heightened terrorism alerts in the first half of 2003. Importantly, the DOE has put new procedures in place, which we believe will minimize the likelihood of future lockdowns. As a result, we were largely unaffected by the heightened terrorism alerts in the fourth quarter of 2003. Looking ahead, we expect continued growth in the Nuclear Segment in 2004, as we focus not only on treating mixed waste, but also on characterizing and handling the waste, which should ultimately improve the flow of waste to our facilities, and reduce the irregularity of this revenue stream."

Dr. Centofanti continued, "We continue to make strides in improving the profitability of our Industrial Segment, which we should begin to recognize in the second quarter of 2004. Importantly, we are now focusing on higher margin accounts, and expect the recent workforce reductions will result in annual savings of approximately $3.2 million. Moreover, we continue to identify attractive growth opportunities that will utilize our state-of-the-art biological wastewater treatment process, including the destruction of chemical weapon byproducts."

Perma-Fix Environmental Services, Inc. is a national environmental services company, providing unique mixed waste and industrial waste management services. 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 nuclear services segment provides radioactive and mixed waste treatment services to hospitals, research laboratories and institutions, numerous federal agencies including the Departments of Energy and Defense and nuclear utilities. 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 information concerning possible or assumed future results of operations of the company, continued growth in the Nuclear Segment in 2004, improving profitability in the Industrial Segment, and minimized likelihood of future DOE lockdowns. 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, the ability of the company to apply and market its technologies, neither the government nor any party which has granted the Company a material contract terminates their contract prior to expiration of the term of the contract, the DOE's failure to abide by or comply with its contracts or to deliver waste as anticipated, and the continued acceptance of our new wastewater technology. 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.

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                             Three Months Ended       Twelve Months Ended
                                 December 31               December 31

(Amounts in Thousands,

     Except for Share
     Amounts)                 2003         2002         2003         2002

    Net revenues           $20,002      $20,236      $84,892      $83,404
    Cost of goods sold      13,562       14,220       58,633       59,055
     Gross profit            6,440        6,016       26,259       24,349

    Selling, general and
     expenses                4,500        5,212       18,637       17,909
     Income from
      operations             1,940          804        7,622        6,440

    Other income (expense):
     Interest income             1            3            8           16
     Interest expense        (704)        (753)      (2,841)      (2,903)
     Interest expense -
      financing fees         (256)        (265)      (1,070)      (1,044)
     Other                   (348)           59        (601)        (307)
      Net income (loss)        633        (152)        3,118        2,202

    Preferred Stock
     dividends                (47)         (47)        (189)        (158)
     Net income (loss)
      applicable to
      Common Stock            $586       $(199)       $2,929       $2,044

    Net income (loss)
     per common share:
     Basic                    $.02       $(.01)         $.08         $.06
     Diluted                  $.01       $(.01)         $.08         $.05

    Number of shares
     and potential common
     shares used in
     computing net income
     (loss) per share:
     Basic                  35,631       34,323       34,982       34,217
     Diluted                46,396       34,323       39,436       42,618

                              As of December 31,

    (Amounts in Thousands,
     Except for Share Amounts)                          2003           2002


    Current assets:
     Cash                                               $411           $212
     Restricted cash                                      30             20
     Accounts receivable, net of allowance
      for doubtful accounts of $703 and $698          24,052         21,820
     Prepaid expenses and other                        3,318          3,517
      Total current assets                            27,811         25,569

    Net property and equipment                        53,069         49,925
    Permits, net                                      16,680         20,759
    Goodwill, net                                      6,216          6,525
    Finite Risk Sinking Fund                           1,234             --
    Other assets                                       4,635          3,047
      Total assets                                  $109,645       $105,825


    Current liabilities:
     Accounts payable                                 $6,359         $9,759
     Accrued expenses and other                       14,397         11,706
     Current portion of long-term debt                 2,896          3,373
      Total current liabilities                       23,652         24,838

    Other long-term liabilities                        8,074          7,975
    Long-term debt, less current portion              26,192         27,142
      Total long-term liabilities                     34,266         35,117

    Total liabilities                                 57,918         59,955

    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:
     Preferred Stock, $.001 par value;
     2,000,000 shares authorized, 2,500 shares
     issued and outstanding                               --             --
     Common Stock, $.001 par value; 75,000,000
      shares authorized, 37,241,881 and 35,326,734
      shares issued, including 988,000 shares held
      as treasury stock, respectively                     37             35
     Additional paid-in capital                       69,640         66,799
     Accumulated deficit                            (17,243)       (20,172)
     Interest rate swap                                (130)          (215)

                                                      52,304         46,447

    Less Common Stock in treasury at cost;
     988,000 shares                                  (1,862)        (1,862)

     Total stockholders' equity                       50,442         44,585

     Total liabilities and stockholders'
      equity                                        $109,645       $105,825

SOURCE Perma-Fix Environmental Services, Inc.