Good morning, ladies and gentlemen, and welcome to the Perma-Fix Environmental Services year-end conference call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.
Thank you, and good morning, everyone, and welcome to Perma-Fix Environmental Services' fourth quarter and year-end 2021 conference call. On the call with us this morning are Mark Duff, President and CEO, Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing fourth quarter and 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures.
All statements on this conference call, other than a statement of historical fact, are forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors which cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission, as well as in this morning's press release. 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. In addition, today's discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release and on our website.
I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.
All right. Thanks, David, and good morning. Obviously, we're disappointed with our financial performance in 2021, with revenues down about 30% over 2020. However, we were able to secure a positive earnings per share of $0.07. Despite these results, 2021 was a very productive year operationally. We believe we've built a solid foundation for growth in 2022, and we're confident the momentum we developed prior to COVID, which resulted in strong growth in revenues in 2019 and 2020, will be achieved again through the coming year. The weakness in revenue growth we experienced in 2021 continued into January of this year as a result of the latest COVID variants.
However, despite these challenges, the treatment segment revenues increased 9% for the year and approximately 57% for the fourth quarter of 2021 compared to the same period last year. Based on this uptick in revenue, which has continued trending up in 2022, we remain highly encouraged by the outlook of our treatment segment, which has seen increased waste opportunities and evidence of pent-up demand through March here in Q1. Within the services segment, revenue was $39 million in 2021, reflecting the significant impact of COVID-19, which resulted in delayed procurement actions and contract awards. Nevertheless, we were awarded several strategic and high-profile projects that are currently performing very well overall. As a result, our project backlog increased to approximately $66 million, which bodes well for performance in 2022.
While some of the new projects were delayed in Q4, they've all been mobilized now to full operation towards the end of this quarter. We've also been selected on several new IDIQ or multi-award task order contracts that include large funding ceilings and open new markets for us with approved federal budgets. These contracts provide us the ability to bid on task orders among a select group of companies with limited competition and the scope of work that provides us a good sense of the potential opportunities coming up. We anticipate the government will begin awarding related tasks within these IDIQs in Q2 and Q3. We've also been actively bidding on a number of new M&O-type nuclear services projects within DOE as part of larger teams that will likely be announced later this year.
Some of these projects are quite considerable in size, and if selected by DOE, will represent a substantial increase in sustainable revenue to align with our core competencies for many years. Although the federal government has been much slower than commercial sector to resume normal operations, it's important to note that these delays in new project starts have resulted in substantial backlog of both services and waste treatment projects to be procured in 2022. In addition, the recently approved 2022 federal budget spending bill allocates $900 million in an incremental funding increase over last year within Department of Energy's Office of Environmental Management. We believe this additional funding will support increased waste treatment and other projects through 2022.
Based on past years' experience, we often see a significant portion of this incremental funding going towards waste treatment, as the government doesn't like to do big hiring campaigns, with these surges, in budgets. In addition to the 2022 budget, we anticipate meaningful carryover, from 2021 that was not utilized, due to the pandemic, and impact to, the different sites. As a result of these factors, it's clear to us that there's a solid federal budget and significant backlog of demand that we expect to capitalize on going forward. As I mentioned earlier, we're already starting to see signs of this improvement.
In addition to our base business, we're very excited about opportunities related to the test bed initiative, also known as the low-level waste off-site disposal project in support of the DOE Hanford tank disposition mission. The second phase of the demonstration will include extraction, shipment and transportation of 2,000 gallons of tank waste to our Perma-Fix Northwest facility in Richland, Washington. DOE officials have stated the shipment of this waste to our facility should occur by late summer 2022. In public comments, the DOE's manager for the Hanford site recently stated, and I quote, "I would certainly like to execute the test bed initiative as early as we feasibly can." Unquote. He went on to state that funds are now available for both installation and removal of the needed equipment.
In similar comments, the nuclear waste manager for the Washington State Department of Ecology, that's the regulator up there, stated, and again I quote, "We have TBI as a priority. Once an application is sent our way, if we have to pull resources from another program, we will in order to process that application." End quote. As you can see, TBI has certainly become a priority at both the federal and the state levels in Washington. In addition, the recently enacted federal spending bill includes an additional $7 million specifically allocated for the Test Bed Initiative in 2022. This underscores the visibility and support for our solutions and technology, both by the DOE and by Congress.
We remain confident that demonstration will underscore the effectiveness of grouting as a supplement to the DOE's current vitrification strategy, which is based on the new DFLAW facility at Hanford, while our technology also provides substantial cost savings, immediate capacity, and a dramatic reduction in carbon emissions, which is the core, or at the core of DOE's current mission. It's also important to note that in 2021, despite the challenges, we took a number of steps to prepare for the future by enhancing our capabilities and our personnel. I'm especially proud of the fact that we were able to maintain our workforce despite industry-wide labor shortages. As a result, we have the ability to ramp up quickly to support large procurements, and that we're bidding right now, as well as supporting projects that are ongoing in the field.
We also completed a number of facility upgrades and technology deployments to support our expanded revenue streams within our treatment segment. This technology deployment includes the addition of our new vacuum thermal desorption system, which is currently ongoing a hot start-up phase, and will begin to treat waste in April, early April, likely next week or so, with a solid backlog of waste in inventory, and a strong market potential, both with the federal government as well as the oil and gas industry. To wrap up, we've built a solid foundation, and we're finally starting to see a return to normalization following the pandemic. The federal government has begun announcing new projects that have been on hold for quite a while, and we expect to benefit from the improved budgets and carryover spending from the last year.
Given the steps we took in 2021, we're in a great position to take advantage of the pent-up demand, and we continue to invest in our capabilities and facilities and have built a highly scalable infrastructure internally, and we've maintained a solid balance sheet, with a cash balance right now more than $4 million, or as of December 31, 2021. Even though 2021 was a challenging year, we are seeing improvement in our project backlog with increasing waste treatments through March and have much better visibility on the second and third quarters. As a result, we look forward to resuming the momentum we had before the pandemic and are very encouraged by the outlook for 2022. On that, I'll turn the call over to Ben, who will discuss the financial results in more detail. Ben?
Thank you, Mark. I'll start with revenue. Our total revenue from continuing operations in the fourth quarter was $17.1 million compared with last year's fourth quarter of $28.3 million. This decrease of $11.2 million or 39.6% was entirely due to the drop in revenues in the Services Segment of $14.4 million, resulting from delays in the startup of three large projects for reasons related to COVID-19, government funding delays, and customer scheduling decisions. Offsetting this drop was an increase in our revenue in our Treatment Segment of $3.2 million, as we did see increases over prior year, but we continued to feel the effects of delays in shipments compared to the pre-pandemic levels.
For the year ended 2021, revenue was $72.2 million compared to $105.4 million, or in 2020. As with the fourth quarter, the Service segment was the main driver for this decrease as revenue dropped by $36.1 million or 47.9%. The segment encountered delays in project awards in the early part of the year, as well as the completion of a large contract in the latter part of the year. As with the quarter, delays in starting the three new projects awarded contributed to the drop in the revenue. Again, as with the quarter, the Treatment segment revenue was up due to the modest increase in waste receipts, though the delays in getting back to work by our government employees kept the waste receipts below the pre-pandemic levels we're used to.
Turning to our gross profit. Our gross profit for the quarter was $1.3 million compared to $3.2 million in 2020. The drop in gross profit of $1.9 million came from the Services segment due to the low revenues as discussed. The drop in gross profit did have a partial offset with an increase in gross profit from the Treatment segment of $1.9 million, again, related to improved revenue. For the year end 2021, gross profit was $6.8 million compared to $15.9 million in 2020. This drop was attributable to both segments, with lower revenue accounting for most of the variance and lower margin work in the Services segment, while the profitability in the Treatment segment did improve over prior year.
Our SG&A costs for the quarter were $3.3 million compared to $2.8 million in fourth quarter of last year, while SG&A in the full year was $12.8 million compared to $11.8 million in 2020. In the quarter, the increase resulted from higher marketing expenses related to trade shows, general travel, and consulting and legal fees related to the sale of our medical subsidiary. For the year, there were higher bid and proposal expenses related to new projects as well as increases in general employee expenses, legal fees, and other general administrative expenses. Our net loss attributable to common shareholders for the quarter was $2.5 million compared to last year's net loss of $10,000.
For the year ended December 31, 2021, net income attributable to common shareholders was $835,000, compared to income of $2.9 million in the prior year. Our basic loss per share for the quarter was $0.19, compared to zero or breakeven in the prior year. Our income per share for the year ended December 31, 2021 was $0.07 a share, compared to income last year of $0.24. Adjusted EBITDA from continuing operations for the quarter, as defined in this morning's press release, was a loss of $1.7 million compared to income of $709,000. For the year, our adjusted EBITDA was a loss of $4.8 million compared to income of $5.4 million in 2020. A few balance sheet items.
For the year, cash balance was $4.4 million compared to $7.9 million at the end of 2020. Our current accounts receivable and unbilled collectively were down $3.7 million, which reflected the drop in revenue primarily in the services segment. Our current liabilities were down $7 million, reflecting decreased operations in the service segment, timing of payments, and the forgiveness of our current portion of our PPP loan, which was forgiven in 2021. Our waste backlog was $7.1 million in the treatment facilities, compared to $7.6 million at year-end in 2020. Our long-term liabilities were down $2.77 million, primarily from the forgiveness of the long-term portion of the PPP loan.
Total debt for the year was $1.1 million, excluding debt issuance costs, with most of the $1.1 million due to our primary lender, PNC Bank. Our working capital was $4.1 million compared to $3.7 million at the end of 2020. Finally, cash used from operating activities was $6.3 million. Cash used by our discontinued operation was $525,000. Cash used by investing activities was $1.6 million, primarily capital spending. Cash provided by financing was $4.9 million, consisting of the equity raise of $5.8 million, less our monthly term payments to the term loan for $427,000 and other net financing payments of $402,000. With that, I'll turn the call back to the operator for questions.
Thank you. Ladies and gentlemen, the floor is open for questions. If you have any questions or comments, please indicate so by pressing star one on your touch-tone phone. Pressing star two will remove you from the queue should your question be answered. Lastly, while posing your question, please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. The first question is coming from Howard Brous with Wellington Shields. Howard, your line's live.
Thank you, Mark, Ben, Lou. Hope everybody is well with you and your families. In listening to your comments, Mark, basically what you're telling us is with the budget in place and the bids out there, you expect a very good second quarter and onwards. Is that a fair comment to sum up your comments?
It is, Howard. You know, March was a good month for us. We finally started seeing things get back to normal, as I said. A couple of things I didn't say was that the federal government employees themselves are making their way back to their offices throughout the country and D.C. particularly, which will likely increase efficiency in the procurement process, but to also make them a little more accessible to discuss upcoming opportunities, understand what's needed to win and solve some technical problems, those kind of things. It's just normalcy, really.
The other part of it too, Howard, is if you look at our waste treatment bidding that we do, we maintain a lot of metrics on bidding, which is a direct reflection of sales and how our sales folks are performing. We've added a couple of new salespeople over the year. They're just now starting to really get some traction, and we've seen our number of bids go up from basically, this is just waste treatment, from about 15 in December 2021 to 28 in March, which is a pretty
Pretty linear and gradual increase over those four months. 20 bids in a month is pretty good. You know, Q1 is always our slowest month on waste receipts and sales. I really look at that. I'm very encouraged by where things are going on the treatment side of the house. Some of that's attributable to our new technology. I mentioned our VTD technology, but there's a lot of other ones as well, other things coming in. One last point along that line too is that DOE has gone through several major procurements in the last year, particularly the Central Plateau and the Idaho cleanup project, as well as the big one here in Oak Ridge.
All those have gone through a transition which had some form of impact in Q1, where they weren't shipping waste because they're changing their procedures over and new management in some cases and getting their contracts negotiated. Those are all over now, and we're really starting to see a good backlog of task orders for waste treatment, particularly in Q2 and Q3. It does look very promising at this point.
Let me, and I'm sure everybody on this call wants to think or talk about the, if you will, the elephant in the room, which is a TBI contract. The main contract, was it 15 years, $45 billion, was won by BWXT, and they lost the contract. My understanding, and correct me if I'm not correct, is that we will finally see a resolution, sometime in October of this calendar year. Is that a correct statement, and can you expand upon that?
Yeah. The DOE did pull back that award. They took several years to completely redo the contract or the procurement to include the operation of DF-LAW, which added a significant amount of scope to the procurement. The anticipated funding is $45 billion over 15 years. We did participate in that procurement, and that will include not only the tank operations again, but also the startup and operations of DF-LAW. Right now to answer your question, they are anticipating award in what is our Q4. They seem to be on track for that. They had orals last month or earlier this month, I should say, and they're on their way. Hopefully they stick to that schedule.
That'll be important to us and to all the other bidders as well. It's an exciting procurement, exciting contract.
It's also my understanding that, BWXT is rebidding on the contract, and there is one other bidder, which is whomever your prime is. Is that correct? Is that my correct understanding?
Yeah. I really can't talk about procurement, or intelligence on the procurement 'cause it's so sensitive at this point, Howard.
Okay.
Yeah.
Let's talk about the TSCR, tank-side cesium removal. They've done about 1 million gallons, and they put them in cleats. Is that correct? Is there an opportunity for Perma-Fix to treat that waste?
Well, we'd like to think so. You know, DOE is very aware of our capability. I think, you know, I don't wanna speak for DOE in regards to their strategy, but my understanding is that they are going to be continuing to run the TSCR, which has been quite successful for DOE up there, and continue to run it until they get a backlog, so they can run that million gallons or so through the new DF-LAW facility when it gets fired up, which is currently scheduled for December of 2023, so another 18 months or so. We're hopeful that they'll look at that waste and say, "Let's keep that TSCR rolling and treat it with the TBI technology, the grouting technology we've discussed.
Right.
That has not been a position that DOE has addressed yet. Hopefully they'll see the value in getting that waste off-site and demonstrating TBI at an operational level and allow them to continue to pump and treat that waste through the TSCR so they can continue to reduce the risk of the tanks.
Last question on the TBI. For discussion purposes, you do the 2,000 gallons, it's successful. When do you have the opportunity of treating the 300,000, 400,000 or 500,000 gallons? Is this a 2023 event?
Most likely, Howard. That's a difficult question because there's a lot of things that could happen between the 2,000 gallons and going operational, which is phase three, which is viewed right now to be either 300—somewhere between 300 and 500,000 gallons. DOE has some flexibility in how they wanna handle that, depending on the comments they're getting back from their regulatory documents right now. That's where this process is kind of ongoing. They have what they call WIR.
Right
Waste and an EA. Both those have to be finished. I think it probably depend on the comments and what they see on there. They'll make a determination on how fast or the process that will happen between those two phases based on that. It's hard to say, but in worst case scenario, we'd certainly think that would come in early 2023.
My last question, the nuclear facility joint venture with Westinghouse in England. Can you give us a little bit more details as to when you'll be in operation? What kind of capacity, volume, margins?
The reason I can't give you too much information is that that is tied to a procurement that we've been working on for quite some time. There's a contingent component to that. We're in with both feet and currently in the planning stages. Because it's tied to a procurement, I really can't talk about that too much. We're anticipating, irrespective of that procurement, just based on the market in Europe, that facility should be able to do between, you know, $10 million and $20 million a year in revenue. It's totally speculative, but what we're really deploying there, Howard, is a facility very much like we have at Richland.
What we're doing is really opening up the market, deploying technology which we've used for 20 years and very successful, and productive, and efficient, to support the markets in Europe and Asia. Those markets are very large. There's enormous quantities of waste and storage over there that's basically got no place to go. You know, this technology has about a 90% reduction in size or volume, which will allow us to treat that waste, get it stable, and put it back or hand it back to them with much less footprint, much less risk and safety risk, environmental risk. Really high value there. We have a great relationship with Westinghouse, and we're working on the design as we speak.
Hopefully, if all goes well, our seed procurement's awarded or even if it's not, I'm pretty confident within 18 months to two years, we will be able to be treating waste in England.
That's all I have. Good luck.
All right. Thanks, Howard.
Hope everything works.
Thank you, Howard.
Thank you. Bye.
We appreciate your support.
The next question is coming from Aaron Warwick with Breakout Investors. Aaron, your line's live.
Hey, guys. Good morning. As you noted, disappointing results, which I think we all expected based on the situation, but really happy to hear about the future outlook. Only thing I wanted to talk about or ask about in addition to what Howard asked, was about other international opportunities. You've mentioned some of those before, and just wondering what the status is there. Specifically, you mentioned Germany and Italy in addition to the U.K. Had a big influx of interest you noted on the last call. What's the status of those right now?
It really is an exciting program, Aaron, for us over there. Right now, we're getting our second shipment from Germany, so that's gonna continue. That'll go to Northwest as well. We have actually two other waste streams that we're getting from two other different countries in Europe. I can't really talk about specifically where at this point. We're working through some of the permitting that has to happen with the NRC to import and export those wastes. To answer your question, we have a spreadsheet that's probably got that 10 or 12 very specific waste streams that we're anticipating in the next 18 months.
Those waste streams range between $500K and $20 million to be procured and awarded again over the next 18 months or so. We really see a lot of action with that. Even though it's hurting us a little bit because of transportation, which is one reason why we're moving this thing to England. That's not that much compared to the cost of treatment and everything that goes along with this. Even though we're seeing our shipping costs double for a typical set of sea land, that would take you from $60,000 to $100,000 or so on a $1 million shipment.
To answer your question, the market's going very well based on the fact there's not a lot of treatment opportunities commercially available for any of that waste in Europe. As you probably know, they're ramping down on some of the reactors in Germany. They already have. There are other places as well. Storage costs are extremely high and getting higher. Now, if you look at the cost benefit curve, it's starting to become much more feasible economically to treat that waste than to simply keep it in storage and pay the high storage costs. As long as that keeps trending, we're pretty excited about it. Westinghouse, our partner, knows that market over there very well.
They fabricate fuel at the facility that we're gonna be putting this facility in Springfields, England. They know the nuclear market extremely well and have very strong contracts as well. We're pretty excited about where things are going.
Good. I think I know the answer, but just to clarify, when you say the $500K-$20 million, I think you're talking per project, right? Not in total of those levels.
That's correct. Per project.
Okay. A final question, I guess I just happened to think about, too, is the backlog. What I think you said $66 million. What do you define as backlog? In terms of how long you think it'll take you to work through that, I guess.
Backlog's defined for the services segment as work that's under contract and funded contracts. Very high degree of confidence. They do range from 6 months to 18 months from now. Most of those were awarded in August, September. The longest one out would be 18 months. The majority of that will be this year. There may be $5 million or $10 million that would bump into the next year or a little bit more than that, but it all depends on the change orders and how we can accelerate the projects. I just toured the two biggest ones up at Princeton and the ship at the Norfolk Naval Shipyard. Just the last 2 days with Andrew Lombardo, who's our Executive Vice President for Services.
Both those projects are going extremely well. They're one's way ahead of schedule, one's right on. We have great teams there, and the client's very happy. Our margins are looking really good, and we're real happy with how those are proceeding, and hope that we can accelerate those to get most of that revenue this year.
Great. Thank you, guys. I appreciate it. Looking forward to the rest of the year.
Thanks, Aaron. Appreciate it.
Okay. The next question is coming from Ross Taylor with ARS Investment Partners. Your line's live.
Thank you. Could you give us a little bit more color? You mentioned the ship down in Norfolk, but looked like last call, on a couple calls, you've talked about the substantial opportunity you're looking at coming out of the Navy, you know, what, 40, 50 vessels being decommissioned over the next five years. It looks like the Navy wants to actually accelerate decommissioning vessels this year above what they were projecting a year ago. Can you give us color on both the opportunity and the potential flow of business out of that segment of the company?
That's a great question, Ross. It was why we were in Norfolk the last three days. The bottom line is you may have seen an article that recently came out about the funding and acceleration of some of the work. Surprisingly enough, the Navy was not real clear on what's next. I think the number was nine ships in it to be procured in the next 18 months. One or two of those are nuclear. As far as what we could see in procurement space, it's very difficult to understand when the procurement's gonna come out. The Navy's dealing with a lot of other priorities, obviously, with the situation the country's in.
Increased costs are dramatic at the shipyard between the fabrication as well as everything that goes along with ship maintenance. They're juggling that procurement strategy, they weren't able to provide a lot of detail. I can't tell you exactly what's happening, but we can say there's nine ships that are coming, that one or two of those will be nuclear that we'll be participating on. There's also a couple other facilities at the shipyard as well that will likely be procured in 2022, FY 2022 for the government that we'll be in a great position for. You know, we have such a good team on the ground there of seasoned people that know how to do this kind of work.
There's not a lot of other commercial contractors on the ground like that, so we're pretty confident that, with our subcontractors we have, we'll have a good shot at, the following work. It's gonna be difficult to predict that in the next two quarters. Certainly by end of this Q2, we'll have a better schedule what's coming up.
Can you talk about what the potential value per ship is? I know every ship has its own unique characteristics and the like, so I wouldn't think there's anything like a normal ship. Is there, if you think about it in that fashion, what kind of revenue opportunity are we looking at?
It's really difficult. I'd be speculating, Ross, to answer that question, but I will tell you what I do know, and that is the ship we're doing now, which is a very large tender, which took care of a lot of subs. I wanna say it's 600 feet or so maybe 700 feet with an 80-foot beam, so it's a big ship. You know, in the $40 million-$50 million range. It's probably one of the smallest jobs. They have two aircraft carriers there, the Nimitz and the Enterprise. And those are both, you know, in the near future, those will likely be well over $1 billion each. And I think there's a lot of ships in between $50 million and $200 million each.
It all depends on the level of contamination, which is what we do is decontamination and removal, so they can disposition the ships themselves for whatever mission they wanna do with them. I think that's gonna be generally where most of these things fall, somewhere between $50 million and $200-$300 million.
they do represent substantial opportunity for you, and they effectively have to get done.
They do. If you've ever been to Norfolk Naval Shipyard, which is a fascinating tour, the drive, just drive around, you'll see all the dry docks and all the docks there. That's where they maintain all of our fleets for the Navy, and they're just running out of space. They need to move these ships out, especially the contaminated ones which are taking up space there, and make room for their new fleet and focus their resources on refurbishing and building new vessels. It's a great business for us. It ties very well into DOE decontamination and that type of workforce. Our guys are really thrilled to be there and are really enjoying the work.
Okay, great. That's it for me, and thanks, and good luck, putting more backlog into the system by the next quarter.
Great.
That'll be great to hear.
Thanks. Thanks, Ross.
Thank you.
Up next, we have Ryan Hamilton with Morgan Dempsey Capital Management. Your line's live.
Okay, good morning, and thank you for the time. I guess we'll jump in real quick. You touched on bidding activity in March. Can you give us some comments about what you're seeing as far as the size of those contracts and maybe what you're bidding on and maybe the number of people that are participating in that process, you know, competitors that are bidding it alongside you.
Yeah. It's a difficult question, Ryan, in regards to the size. They vary from small things like $50K to $100K waste stream to a couple million. There's some waste streams we're bidding with DOE there that are even more than that. So they really range. I don't have the numbers on what the value, total values of those 28 bids I mentioned from March would be. And that would be difficult to describe 'cause there's a lot of surcharges and other things that go into those things that make it difficult to predict where that might be. So I'm gonna have to say I'm not gonna be able to answer that at this point.
I can tell you, we typically have two three bidders, four bidders that we compete against. Unitech is one, EnergySolutions, WCS. And Veolia. Each one of those companies offer different treatment alternatives, or direct disposal. And we don't win everything. They have some things that are definitely cheaper than us. If you could direct dispose of a waste, we'll very seldom be able to win that. However, we usually don't bid those, if you can direct dispose them because that's just gonna be better value to our clients. What we bid are typically ones that need some type of technology to get them into a position where they can dispose of them, and that's where we make our money.
It's really more of an indicator of the activity that's out there in regards to our clients, not only expanding our market and our relationships, but also evaluating how much our clients are spending and focus on getting waste off their sites that they haven't been during the pandemic. That's really more of an indicator of that. Next time we have our next call, Ryan, I'll be able to give you an answer in regards to what those numbers look like.
Sure. You know, historically, looking back over the last couple of years, how does that bidding activity, what does it look like? Is it out of norms? Is it something that you're expecting to see? Maybe you could just touch on that, how it looks historically.
A general answer, Ryan, would be that for Q1, that's much higher than normal. I'd say I'm gonna speculate, 'cause I don't have those numbers in front of me. It's probably double. As far as the rest of the year goes, we're typically doing two or three to five bids a week, and so 20 a month would be a reasonable month. We had 28 in March. That's a really good month for the month of March.
All right. That's great. I might have missed it, you know, you're talking about the new facility in England. Are you planning to send all overseas business there when it's completed? Is that the plan or is there something else in mind?
No. You talking about the Westinghouse facility? Is that what you're talking about, Ryan?
Yes. Yes, sir.
Yeah. No, Westinghouse, the Westinghouse facility that we're teaming with them on would just be for European and Asian clients. It's very specifically not competing with U.S. That's a good question because it's an important comment. That was part of our arrangement with Westinghouse, U.S. markets will definitely be better served here with it and not ship over there.
I'm sorry. I may have misworded it. I'm asking if everything that you're doing overseas is gonna go to England. Obviously, keep everything here in the U.S.
What we're proposing to build in Springfields, and again, it is contingent on a number of things, but is moving forward quite quickly, is going to be very much, if not exactly like our facility at Perma-Fix Northwest. There may be some waste that we don't run through that technology in England that would come over here. We do have some other capabilities here that will not be included in that Westinghouse facility. I would say that there may be some that come over here, for some of the other technologies that we provide, but, most of it, you know, 75%-80% of it would go to that Westinghouse facility.
Okay. I got it. I appreciate the time. That's all I've got for now. Thank you.
Thank you.
Once again, if there are any remaining questions or comments, please indicate so by pressing star one. Up next, we have John Brown, Private Investor. John, your line's live.
Yeah, I have two questions. First of all, there's a public document contract with worth about $95 million, and it has your name on it. I guess you're one of the competitors, but it is a public document. It is worth $95 million over a period of some years, and it has your name on it. Can you clarify that? Can you talk about that? Is that something you're competing for still? Just give us a little color on it.
Sure, John. You know, I'm very hesitant to spend a lot of time talking about what we call IDIQ or MATOC contracts. MATOCs are multi-award task order contracts. It's usually a number of awardees. There's a ceiling on those MATOCs that come out of the Corps of Engineers, and those ceilings reflect a limit that the contracting officers can run through those contracts without having to rebid them. We were successful in winning five MATOCs in the last quarter. I think it was last quarter. May have been the end of Q3. But the bottom line is the five MATOCs, one for each region. We're the only company that won one in every region that I'm aware of.
Each region in the U.S., they break them up into five for, you know, Pacific Coast and Northeast, Southeast, Central and West. Each one was worth $95 million at the ceiling, so they can start running task orders through those MATOCs to the awardees, somewhere between three and 10 awardees, depending on the region, and use those as basically a pre-qualified group of vendors that they can just simply put a task order out, or that task order will just be a scope of work or a project. You turn around a quick fixed price bid, you know, sometimes in a week or less, or a week or two, I should say, and then make a quick award, and you go quick. Everyone's already been pre-qualified.
They've got the capabilities. They've got everything they need in place and ready to go. We have those five with the Corps of Engineers. It goes through the Huntsville office for demolition services at military bases throughout the U.S. The reason we're excited about those is particularly because those demolition projects are needed for infrastructure upgrades at the military bases to put new facilities in and new infrastructure. We expect a large backlog of these task orders. We've owned or supported 2 of those in the past for the Northeast and the South. We typically, on each one of those, would do $3 million-$5 million a year and perform very well. I have a great team of people that do that for us, and they're very successful.
Those were all stymied based on COVID and then based on the federal budget not being passed. In other words, you can't use those MATOCs when there's a continuing resolution. You have to stop. Both those things are fixed now or over, and we're optimistic that they'll get rolling on those, and hopefully by midsummer, we'll have a few of those task orders under our belt.
Okay. Thank you. The other question I had was, you know, you compete in a field with a lot of different companies, and you're rather small in size, you know, so you have a limited amount of leverage. I'm thinking about we recently saw a merger with one of your competitors, and I'm just wondering, how much more effective or how much more competitive could you be if you know, if you were merged with someone or taken over by someone that you know, that could give you more resources and more leverage and so forth, how much more would that increase or would help your business?
That's a pretty tough question, John. You know, it depends on who you're merging with and what the terms are. You know, we really like to focus on our niche, and that is the RAD market, the radiological market, along with waste management. Together, you know, we have a real strong capability that most of the big companies don't have. We have six certified health physicists on our team. Most of the big companies aren't anywhere close to that. Those guys are really kind of the cornerstone of our services group.
Not to mention that we have these assets in each of our facilities, and along with, you know, senior waste engineers that know how to do this type of work, and solve problems. Having said all that, we obviously could benefit from being part of a larger company. We don't have a lot of small business set-asides. We have some small business work, but we don't rely on it. We kind of view ourselves as a big company in competitive space. I'm sure we could benefit from that type of merger. Right now, we're really focused on getting healthy again, back to where we were in 2020.
As I've said on many of these calls, you know, our goal is to get to $200 million in the next three or four years. We really view that as a sweet spot for us financially, and that we'd be able to do very well for our shareholders at that level.
Yeah. If memory serves me, within the last couple of years, it seemed like you got rid of that. I mean, can you clarify that a little bit?
We did. We did not renew it. The poison pill was put in place by our board because our board, along with the management team, felt very strongly that our future was much brighter than what our stock price was. So we wanted to make sure we had that legal position to consider that, you know, based on a takeover type situation. We saw the need to put that in place until we could get to the level of revenue and profitability that we saw, you know, within our reach, and provide that certainty that we would be able to realize those revenues that are still a couple of years out.
You don't have anything in place right now that would prevent somebody from making a bid for your company.
No, that's correct. We do not.
Okay. Thank you.
Up next, we have Howard Landis, Private Investor. Howard, your line's live.
Two questions. There's a reference in the press release to a material weakness, certain revenue contracts, with non-standard terms and conditions. Noted that your AR billing on billing is over 100 days of revenues. Do you see a risk of write-offs, Mark, in AR coming up or additional reserves?
We'll let Howard let Ben Naccarato address that. Ben?
Yeah, Howard. No, we don't. We as you know, we look closely at all of our receivables. There is a couple of contracts, particularly that we've had a slow, it's been a slow process with the customer, change order related, et cetera, and that's what gave rise to some of the outstanding receivables. No, we're pretty comfortable with our AR right now and don't believe anything material will be written off.
Okay. The contracts that weren't properly evaluated, are they mostly behind you, or do you still have some that are out there to deal with?
Yeah, they're behind us. It really is an expertise that this is an internal control issue, and it was something that just was put in place in June when we hit a certain market cap. Our infrastructure and labor, you know, getting the labor intact and the expertise intact was a little slower than we had hoped it would be. We're on it now, and it was an aggregate issue more than anything. Nothing material, and nothing changed the financials because of it.
Great. Thank you.
We're comfortable it's behind us, and we'll remediate it this year.
Good. Thank you.
Okay. The next question is coming from Steven Tan, private investor. Steven, your line is live.
Hi, guys. How are you?
Hey, we're good. Thank you, Steve.
Okay. With regard to the $66 million backlog, I didn't hear. So how much of that is service and how much of that is treatment?
That's 100% services, Steve.
Okay. All right. Well. All right. Times have been tough. You know, you guys have survived as you've always survived. One of my thoughts is, how much of your competition is going out of business?
That's a difficult question, Steven. You know, we know that several of our competitors have taken steps back. Several of our competitors have closed facilities, and which is important to us. I don't wanna talk about our competitors too much at this point in regards to specifics. I do have lunches and conversations with our competitors frequently and know that everyone has suffered. I don't know if all the numbers are the same as us because they're not public, some of them, but everyone has suffered on waste receipts dramatically. The companies that have done well are the ones that had, you know, five to ten million, or excuse me, five- to ten-year contracts for services that were able to maintain stability through that period.
We did, for a year, we had good backlog for a year into the pandemic, then those projects ended, you know, in early 2021, and we found ourselves without the ability to ramp, you know, to replace them, I should say. The companies that did well were the ones that had the ones that were sustainable through that period of time. To answer your question maybe specifically, no one. I don't know if anyone's gone out of business, that we compete with normally. Companies have gotten weaker. They've lost personnel, key people. We've gained a couple from that period, and they've lost position to a certain degree.
I think most of our competitors, particularly in the waste treatment space, are gonna be pretty close to where they were two years ago, with the exception of a couple of facilities we know that are closing.
With regard to the announcement today, it says you're out of the medical business. I mean, is that a write-down? You wrote down $1.2 million or is that what I'm interpreting there?
Yeah, Ben, you wanna address that?
I'm sorry, can we ask again?
In the announcement today, it said you are out of the medical area. Is that the final number we're gonna see on, you know, in the financial statements with regard to medical? Is that it? You're done?
Yeah. Yes.
Okay.
Other than, you know, a few immaterial dollars for cleanup.
Yes
For the most part, the segment is off the books.
All right. So I got you, Ben. Also in the announcement, there was some statement about some functional problems that occurred in accounting or something like that. I didn't understand that. What was that about?
That's what an earlier caller, I think it was Howard, asked earlier about a material weakness. Steve, as of June, we had a new requirement that the auditors have to attest to our internal controls. What that means-
Okay.
You've heard SOX, Sarbanes-Oxley rules.
Yeah.
In the past, they did not have to. This year, because of our market cap, they now have to attest.
Okay.
What they did-
No. Okay. All right.
It's all good.
That's cool. Okay. The Canada deal, which you had an announcement on sometime during the year which stopped. How's that coming along? Are you collecting that or is it? Is that what's ballooning your accounts receivable?
Yes. That's the one. It's moving along. It's discussions with the customer to get it resolved because the contract is effectively over. It's just a lot of negotiation back and forth, discussions, reconciliations. A lot of these big contracts end up the paperwork behind it all is usually the biggest log jam. The work is usually done to everyone's satisfaction, but it becomes documentation, and that's where that is. Yes, it is what's behind the AR.
All right. Thank you. I guess I'm going back to Mark. Let's talk about the TBI. All right. I've been sitting here five years listening to this story. Where are we? The last thing, you know, was supposedly there had to be an environmental study before anything could happen. How is that coming along?
Yeah. The status of it, Steve, is the ball is in DOE's court. DOE has to conduct an environmental assessment under NEPA, the National Environmental Policy Act, which included public comment. They had to get that completed. They also had to do a report called Waste Incidental to Reprocessing Report, which basically covers them in regards to the fact that this is not high-level waste they're sending off site. Both of those had to be done, and they both had to get public comments. DOE currently is in the process of addressing those comments, incorporating them into their documents and their alternatives and decision.
When those are both completed, they have to get a permit for this work from the state. Right now that's kinda where it is as they're in the process of finishing up those documents. Public comment periods were months ago, and they should be applying for that permit in the next month or few months. I don't know exactly what their schedule is. I don't want to speak to them, but that's the process. As I said, there's a recent article where the management from both DOE and the regulator were quoted stating that they're on track or they're working on that hopefully to have something, you know, this summer. They're both making a priority out of it.
That's pretty much what I know as far as the status at this point, Steve.
Okay. All right. I, you know, in reading, particularly what I think was the Northwest Energy Alliance. They've had a lot of literature out over the last year. You know, their arguments are that the vitrification plant is, you know, dysfunctional. That it'll create twice the waste. It'll, you know, potentially be clogged up with iodine and technetium. You know, I know this is hard, maybe you can't answer me, but it just seems, you know, if 1/2 of what is being said is so, I just don't fathom how, you know, you're not being taken more seriously, at least as a supporting thing. I, you know, I guess that's a statement.
I won't put you to answer that. You know, as a technical person reading something where it just seems like the status quo continues when it's like we're building a boondoggle here, which may not work. Then there are-
Yeah. You know, I will address that. You know, our strategy has always been to be part of DOE's strategy. That's all we've been pushing for. You know, I was a federal employee with Department of Energy for a number of years, and so I understand they have a much bigger picture than we do, and challenges and political issues and all kinds of other things they're dealing with at the same time. We have a lot of respect for that. We've been trying to be patient as a company, and sitting back and making sure they're comfortable with the data that we have as far as the performance of our technology. They are. We've made numerous briefings. They know what we can do.
They know that this technology is dramatically less expensive. It doesn't generate the carbon footprint. You know, there's a lot of other things that are advantages to it. What we're excited about is being a part of that strategy as a supplement to their strategy. Hopefully they'll see the value of how we fit together with the DF-LAW program, and their overall site mission program, so that we optimize taxpayer dollars and the environment. I think it's. We have to keep that approach, or we'll all go nuts here, because we feel the same as you do.
The bottom line is, it's these guys have tough jobs, and hopefully we'll see that by the end of this year we'll get to that next phase and be able to demonstrate everything we've talked about as far as performance and value goes.
Mark, maybe you should be running for political office. That was a great answer.
Oh, no.
I got two more questions. Okay, presuming my statement on the iodine and technetium is generated by the vitrification process. If that's so, can you guys handle that? Can you guys treat that?
We can handle the waste. We can treat the waste that comes off the TSCR, as was mentioned, Howard Brous mentioned before. The TSCR has, not to get too technical, we'll separate the iodine and cesium out of the liquid that's coming out of the tank. It does that through an ion exchange system. There's a resin there that will capture that. We can take that waste from that extraction system, the TSCR, without any issues at all. We do it all the time for other types of waste. Yes, it's not a problem.
All right. Last question is, you are on that $45 billion contract. You are bidding on it as part of a consortium. Is that correct?
Let me just say, we are participating in that procurement, so yes, we're on the team.
Okay. All right. You know, it's a tough world. It's you know, many nights I listen to the news and just shake my head, and it's just hard to fathom. You're here. You're providing a lot of hope, and I'm proud of you guys and better times to come. Thank you.
We appreciate your support, Steven. COVID has been a real hurdle along with all the other things that are going on, but we appreciate that.
Okay, I'd like to turn the floor back to management for closing remarks.
All right. Thank you, John. All right. I'd like to thank everyone for participating in our fourth quarter and year-end conference call. As we said, we remain extremely confident in our outlook for the business in 2022, and look forward to talking again next quarter. Thank you.
Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.