Good day, ladies and gentlemen, and welcome to the Perma-Fix second quarter 2021 conference call. Our lines have been placed on listening only mode and the floor will be open for questions and comments following the presentation. If you should require any assistance throughout the conference, please press star zero on your telephone keypad to reach line operator. At this time, it is my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.
Thank you, Rashan. Good morning, everyone, and welcome to Perma-Fix Environmental Services 2nd quarter 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 second quarter 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 212-671-1021. 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 could 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 US Securities and Exchange Commission, as well as 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 on our website.
I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.
All right. Thanks, David. Good morning, everyone. During the first half of 2021, we continued to experience the impact of COVID-19 pandemic as the federal government has been much slower than the commercial sector to resume normal operations. This was not unique to us, has been experienced across the industry by most of our peers as well. Nevertheless, we were able to report a net income of $3 million for the quarter. We have $7 million in cash on the balance sheet, have lowered our bank debt to under $1.5 million. Importantly, we've begun to see activity pick up heading into the third quarter, expect a solid second half of the year, barring any further slowdowns related to the COVID-19 new strains.
Not only do we see things pick up this year, but we also believe we're very well positioned for 2022, as there is a tremendous pent-up demand in both our treatment and our services segments. Turning first to our services segments, our bidding pipeline is more robust than ever. As I mentioned last quarter, our teams have been working around the clock, and we've been developing four or five simultaneous proposals at any given time. This is a direct reflection of the improvements we've made internally and specifically within our bidding organization. As a result, we're now bidding on a wide array of contracts collectively valued in the hundreds of millions of dollars. The fact is, that we're not losing bids. The government procurement process has been delayed, and these contracts will eventually get awarded.
Just last month, we were awarded a multimillion-dollar service contract for the Tritium Systems Demolition and Disposal project, which is expected to be completed over the next 18 months. We believe this contract is a good illustration of where things are heading and reflects our competitive edge, as this specific procurement included significant competition with several of our toughest competitors, as well as larger firms all bidding against us. Although this particular contract is smaller than some of the other contracts we're bidding on, it does show that the market is starting to open, and we expect more contracts to be announced and awarded in the coming weeks and months. It's also worth noting that some of the contracts we're bidding on, if we are successful, could be transformative to the company.
Accordingly, these larger site operations and cleanup procurements within Department of Energy are multi-billion dollar awards and include substantial small business subcontracting requirements as a percentage of the revenue. This plays into our strength as Perma-Fix plans to remain a small business, as defined by the government as under 750 employees, for the foreseeable future. While we're working hard to secure teaming relationships on the proposal efforts, even if we're not successful on initial awards, there's still significant future opportunities for subcontracts with these primes on these projects within both of our segments. Turning to our treatment segment, we're beginning to realize increases in waste treatment activity, both in bidding opportunities, receipts, and plant production. As our services segment, shipments have been delayed through most of Q2. It's important to reiterate this business has not gone away.
In fact, the backlog of waste that must be treated continues to grow. Due to the diversification efforts of our sales team, we've been able to penetrate several new commercial markets, coupled with our typical government acceleration at the end of the fiscal year, which is Q3, we anticipate waste receipts rates closer to normal heading into September and into Q4. We also continue to expand our waste treatment offering. We recently completed design and began fabrication and construction of our new Therma-Fix Gen3 system, our third generation vacuum thermal desorption system. The Therma-Fix Gen3 unit offers a treatment solution for problematic waste streams while providing increased efficiency and productivity as well.
With our initial sales launch just a couple of months ago in June of 2021, and even before the unit has commenced operations, we've already secured an existing on-site waste treatment backlog and inventory, and a large sales pipeline, which underscores the demand for this capability, in both the commercial and the government sectors. We're very excited about this system, and anticipate steady receipts up through startup in the fourth quarter, and well into the 2022 timeframe. Turning to the Test Bed Initiative, which we refer to as TBI. It's also referred to as the Low Level Waste Off-site Disposal Project. We continue to make progress and have received strong support from the Department of Energy in terms of providing a supplemental pathway for treatment of low-level waste from the 36 million gallons of tank waste located at the Hanford reservation.
DOE recently notified the Washington State Department of Ecology that they are preparing an environmental assessment on the next phase of the Test Bed Initiative. The environmental assessment, or EA, process is one of the final steps required before we can commence phase 2 of the project, which will include extraction, shipment, and transportation of 2,000 gallons of tank waste to our Perma-Fix Northwest facility located in Richland, Washington. DOE officials have recently stated that shipment of this waste to our facility should occur prior to next summer. As recently reported in the local Hanford area newspaper, the Tri-City Herald, use of grouting, which is the basis of our process to treat the Hanford tank waste, could save the taxpayer billions of dollars and speed the emptying of the tank waste from the leak-prone underground storage tanks.
As we've stated in the past, assuming we're successful, this project can be quite transformative to our company, and will supplement the vitrification unit, which is currently under construction and testing at the DOE Hanford Site. To wrap up, while we're disappointed in our overall Q2 performance, we believe Perma-Fix is well positioned for growth. I'm especially proud of our business development efforts our team has initiated and completed, which highlights our ability to adapt to the changing market. During this period, we've also invested in our capabilities and our facilities, and have built a highly scalable infrastructure with a first-class team of folks to take us to the next level. Now, with the return of normalization following the pandemic, we truly believe we're well positioned to aggressively grow both sides of the business, and we're starting to see things pick up.
As we look at our pipeline for the balance of this year and beyond, we expect to resume solid organic growth, in the near term. I truly believe that the future is brighter than ever for Perma-Fix, and we look forward to driving significant value for our shareholders. On that, I'll now turn it over to Ben, who will discuss the financial results in more detail. Ben?
Thank you, Mark. I'll start with revenue. As mentioned earlier, the COVID-19 pandemic really impacted our revenue, in both segments as government sites haven't shipped the waste at their historic volumes and have been very slow to award or fund projects in the service segment. As such, our total revenue for continuing operations for the second quarter was $16.1 million compared to last year's second quarter of $22 million, a decrease of $5.9 million or 26.8%. The decrease in the revenue is primarily due to the drop in the services segment, and that totals about $5.8 million, while our treatment segment was only marginally down from prior year, about $134,000. The drop in the revenue and services was due to the completion of a large project whose revenue we've not been able to replace by another project or projects of equal value.
For the year to date, June 30th, our revenue is down $7.6 million or 16.2%. This drop in revenue comes from both segments as the service segment has been impacted, again, by the completion of certain projects, and is down approximately $5.4 million, while the treatment segment has been impacted by the drop in volume of waste and is down $2.2 million from last year. From a gross profit standpoint, the quarter was $966,000 compared to $3.3 million in second quarter of 2020. The drop in the gross profit was approximately up $2.3 million, was primarily from the services segment, where reduced project revenue impacted gross profit from both a volume and margin standpoint. Also, lower volume of waste mix had a minimal impact on the treatment segment, while the fixed costs at the plants we were able to keep that fairly constant.
For the six months ended June 30, gross profit was $3.3 million compared to $7.9 million in prior year. This drop in gross profit was impacted by the lower volume in both segments, as well as reduced margins in the service segment projects. Our G&A costs for the quarter were $3 million compared to $2.7 million in the 2nd quarter of last year. This increase of $297,000 was primarily related to increased salaries and consulting expenses that supported the increased bid and proposal activity. For the six months ended June 30, G&A costs were $6.2 million, compared to $5.6 million in the prior year. Again, the biggest impact on this variance was the higher bid and proposal expense from labor costs and outside consultants. Our net income attributable to common shareholders for the quarter was $3 million, compared to last year's net income of $204,000.
The main driver of this improvement was a gain on the extinguishment of debt related to the company's PPP loan, which totaled $5.4 million and was forgiven in June of 2021. Our basic income per share for the quarter was $0.25, compared to income per share of $0.02 in the prior year. Our year-to-date basic income per share was $0.16, compared to $0.12 in 2020. Our 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 $847,000 last year. This reflects the lower revenue in both segments impacted by the ongoing effects from the COVID pandemic. Turning to the balance sheet compared to year-end 2020, our cash on the balance sheet was at $7.3 million, compared to $7.9 million at the end of 2020.
Our unbilled receivables were down $7.1 million, which reflects the reductions in revenue compared to Q4 in the service segment. Our current liabilities were down $8.8 million as a result of the timing of our payments, a reduction in the activity in the service segment, and the forgiveness of the PPP loan. Our backlog at the end of June was $6.7 million, which is down from $7.6 million at year-end, and up slightly from $6.4 million in June of 2020. Our total debt for the quarter at quarter end was $1.3 million, which is primarily owed to PNC Bank, our credit facility. Finally, I'll talk about cash flow activity in 2021. Our cash provided by continuing operations was $803,000. Our cash used by discontinued operations is $315,000. Cash used for investing of continuing operations was $649,000, which is primarily cap spending.
Our cash used for financing was $439,000, which represents our monthly payments on our term loan totaling about $219,000 and another $220,000 for finance lease and debt issuance costs. With that, operator, I'll now turn the call over to questions.
Okay, ladies and gentlemen, we have reached the question and answer portion of the call. To ask a question, please press star one on your telephone keypad at this time. Our first question comes from Howard Brous. Howard, please state your question.
Mark, Ben, first of all, I hope you and your families are well and protected from the COVID. Has anybody been affected by it?
Far so good, Howard. Thanks for asking.
Yeah, we're good. We're good at the family, Howard.
All right, good. Thank you.
Thank you.
That's the most important thing. Let me first start with TBI, the filing. When do you expect that filing to the state?
Right now, they're working on the RD&D permit, and I don't know exactly when that's supposed to go in, Howard. I know that they have scheduled a hearing for the EA based on draft comment, the comment period. That's supposed to happen in the next few months, and then they'll submit the permit to the state. They're doing it in sequence as opposed to in parallel, which is something we're pushing them to try to consider-
Right
Doing both at the same time. All that should happen in the next three or four months, and support getting to a point of beginning to do the extraction in the spring.
Given that permit, what are the possibilities or probabilities that once you start extracting the 2,000 gallons, the spigot stays open?
It's difficult to speculate, Howard. We're certainly keeping that option open, and we're able to support it staying open. We can do up to 300,000 gallons a year now with our capability and with our permit. We're certainly promoting that. DOE would need to decide to do that. There's still some question as to whether they're going to use the Fisker system, which is much more elaborate pumping and extraction system, or the originally designed, what we call pump on a stick, that was designed just for TBI, which is much slower.
Right.
If they use that Fisker system, it'll go very quickly, and pull out about 5 times as fast. That would certainly set this up for a more sustainable approach. I don't know if DOE has made those decisions internally yet, but certainly one could speculate that if you're treating the Tankoids successfully, that they would continue to support that demonstration with greater volume. It would be speculation to make that assumption.
Okay, fair enough. Am I missing something, but is it fair to say that a good number of the mid-level executives in the DOE have not been appointed, and that's part of the problem of the lack of some of these large awards?
Yeah. It is a fair statement, Howard. I think, again, it's real difficult to understand what's holding some of these bids up. As we've mentioned the last several conference calls, we have a pretty sizable spreadsheet of bids that we've submitted, with significant award values, and commitments for awards have been just continually delayed. One could speculate, and I would definitely believe, Howard, that your statement is true, is that because there is not a assistant secretary confirmed by the new administration, that there is a tendency to wait for that to occur. While they do have a good team of folks that are carrying over from the old administration that are managing things, there's just a natural, I think, tendency to wait for the new person to arrive to make these big decisions.
I would speculate across the board, Howard, that the lack or delays of getting the assistant secretaries in place in many of these cases, it has an impact on the procurement process for sure.
Would that be the same for the EPA with the Navajo bids?
The Navajo, what you're speaking about is the Abandoned Uranium Mine program.
Right.
That one is more of a mystery. I have to assume you're correct on that. I don't follow the EPA organization chart as much as DOE, but I have to assume it's a similar situation. I know at one time it was funded. I don't know if that's changed.
It was funded.
We all know it's a significant program that has a very significant future for us and for other participants. We were initially informed that task orders would've been distributed months and months ago. I don't know what's holding it up. We had a difficult time finding information or getting information back from it. I have to assume you're correct, that it's largely because of administration changes.
Well, the settlement was $1.7 billion, the EPA with the Navajo. The contract we're talking about is about $220 million, if my memory serves me correctly. Does that sound about right?
That's basically the contract value for that IDIQ. That's correct.
All right. What about, as an example, Moab, Luckey, Oak Ridge, the Navy bids? Is that all the similar vein that we're still awaiting?
That's correct, Howard. There's also, though, even at lower levels, there's a lot of task orders in the $5 million-$10 million range that don't require that one level of approval. The procurement processes are just moving really slow across the country in all different organizations. We have task order bids at DOE, the Corps of Engineers, the Navy, all waiting for announcement of award and mobilization. It's really every level of procurements have been very lethargic in the decision announcement process. It may not just be the administration issues. I think it's largely COVID related, where it's just a lot of people working from home. The rush to get back out in the field is not there yet because our clients are not out in the field yet. It's really both.
The larger ones are certainly administration dependent, but the smaller ones, I think, are just slow processes in the procurement cycles.
Mark, Ben, wish you the best. Stay safe, and good luck.
Thanks.
Thank you very much.
Appreciate your support, Howard. Appreciate it.
Bye-bye.
Again ladies and gentlemen, to ask your question please press star one at this time. Up next, we have Ryan Hamilton. Ryan, please state your question.
Good morning, everyone, and thank you for taking my questions.
Ryan. Morning, Ryan.
You touched a little bit in your opening remarks, but could you walk us through the cadence of the quarter? Maybe start with March and kind of just walk us through how March fared about, like May looked compared to April and so on. Kind of just walk us through that, if you don't mind.
Yeah, Ryan. We talked about this several quarters ago. We had kind of a fiery discussion, I want to say, in Q3 and Q4 last year, that we expected Q2 to be a tough quarter for a number of reasons. Number one, we had targeted and defined an unusually large quantity of large procurements, like the Moab procurement and a number of others, that were going to require some investment and positioning, that we thought we had a real offering that was going to be very competitive. We did get that, and we got a number of others. As far as the cadence on the services segment, we saw the project in Seattle, which was very good to us for two years, ramp down. A significant ramp up in proposal efforts, which took a significant investment through Q2.
The lack of awards of outstanding bids that we've already submitted. All that together showed, we demonstrated a drop in revenue in the services side of the house, and we were not able to replace quickly enough that Seattle project that was generating significant revenue for us. We're anticipating we'll win our share of these awards. As soon as those things are awarded, we'll be back in action to replace the Seattle project. The one we did win with the Princeton Plasma Physics Laboratory, we'll start to do that. It's ramping up quickly. We have a number of others that are smaller, and we have a couple others that we're expecting to hear about any day. We still expect those to start impacting our end of our Q3.
On the treatment side of the house, as far as your term cadence goes, we did start seeing things pick up. They've ramped up a little bit every month. We had a couple of very sizable receipts bump from June into July and August. That lowered us a little bit towards the end of June. We're starting to see our backlog creep up. More importantly, we're seeing a lot of opportunities to bid on waste receipts. As I mentioned before, we're getting some backlog inventory for our new system in Florida, the VTD. All those things together, and knowing where our clients are going with a backlog to move before the end of the fiscal year, we're anticipating looking at a better Q3 than we did Q2 on the waste receipt side of the house, particularly. We're seeing some things pick up.
Our sales team is very busy now. You asked about the contrast. In March, we weren't flying anywhere. Our clients weren't meeting with us because they had restrictions on visitors. Now our entire sales team, when I look down the hallway, all the offices are dark, and they're out in the field meeting with folks, going to conferences, meeting with commercial clients, doing presentations, all that kind of stuff. It's a lot different energy than it was just in March. That's ramped up through the quarter and provides the energy and optimism we have for where the waste treatment side is going. It's kind of a long-winded answer, Ryan.
No, that's great. I appreciate the color. You touched on backlog. Could you break out what you have between treatment and services currently?
Well, I think I'll let Ben jump in. I think Ben mentioned a $6.7 million backlog at the end of June. I believe, Ben, that was just for treatment, if I remember correctly, and with our services, it's a little bit more than that. You want to address that, Ben?
Yeah. It's $6.7 was the treatment backlog. Services is in around the $30-$32 range at the end of the quarter.
Perfect.
That's funded. Right.
Yeah, no. I'm sorry, what was that?
That's funded backlog. We track various looks at backlog in the service segment because there's projects that you may have one, but it's not funded, and there's some that are high probability. What the surest thing is the funded backlog, and that was at about the $30 million-$35 million range.
Perfect. You touched on SG&A being up a little bit on wages and a couple other things. Assuming that COVID drags out a little longer here, are there any other big-ticket items that you could extract out of SG&A? Do you do costs at all?
Yeah. We're pretty lean on G&A. There's always some, depending on urgency. We're a smaller public company, and certain costs just don't go away. That's why we're so dependent on, and the needle moves so quickly on revenue shifts. Again, there is always certain costs, and we're always looking at them on a regular basis. If you look at the history of our G&A number, good and bad years, it's always been in a certain range.
Got you. Along those lines, as far as increasing wages, on your bidding activity, are you increasing price?
That's a good question, Ryan. It's pretty flat on the services side of the house. It is very competitive as our competitors are quite hungry as well. If you listen to some of the other earnings calls from the big boys that we team with, as well as some of the smaller private companies, everyone's waiting for the same bids, waiting for things to be awarded, and projects are being completed. Same deal. Everyone's really going through the similar cycles. There is more of a tendency to reduce your fee and your margins. Wages are pretty consistent. We're not seeing that change dramatically year-over-year overall. That's really when it's important to have a technology that can cut costs, which we have got several that are in our procurement. We're hopeful we'll be able to show greater value on some of our bids.
Excellent. Along those lines, as far as bidding activity goes, you've touched a little bit on it. Could you maybe go into maybe the size of the job that you're seeing, that you're putting out bids on? Number of bidders? Just walk us through that just a little bit more.
What the bidding activity looks like?
Yeah, it's a pretty broad question, Ryan. In general, we've got the large bids like the Moab one that's been talked about. That's a 10-15-year contract, and Luckey is 10 years as well, which is a site in Ohio. Those are big bids with lots of competitors, it's difficult to really plan on those because they can go many different directions. Most of our other projects are between $5 million-$10 million task orders. We've got probably 10 of those we're waiting to hear on. We have a couple between $20 million-$50 million that we're also pretty optimistic about.
We are pursuing a couple new markets, particularly with the Navy in their ship program and revitalization program out of Norfolk Naval Shipyard in Virginia, where we're taking our expertise that we've developed in the DOE market for decontamination and decommissioning and applying it to the Navy and their programs for decommissioning as well. We're optimistic about that, a number of bids there. As I mentioned, lots of smaller task orders here and there through some of the IDIQs that we have. We've also bid a number of IDIQs. I think we're waiting to hear on maybe seven or eight IDIQs, which are pretty much a license to bid. There'll be more bids once those are awarded. We're optimistic that we're going to win five or six of those and know that they're well-funded. Again, it's just real slow.
They've got to award the IDIQs and then start running task orders through them. We're waiting, like everybody else, waiting for that to happen.
As we continue to wait for awards to be, I guess, handed out, at what point do these facilities just overfill? I mean, at some point, I would imagine they can no longer delay, and it becomes almost a crisis. Is that a right assumption?
Yeah, I know. What you're thinking about is more the operational waste streams that we get, and there is a certain amount of that that does occur. Most of the projects I'm speaking of are cleanup projects. You can kick that can down a road on cleanup, and it doesn't necessarily achieve the scenario you just mentioned. Those projects will remain. Usually, those projects are holding up something else. In other words, if you've got a contaminated building, you want to get rid of it because you want to put something else there or meet a milestone. There is a driver, typically, and that's what we're hoping will start getting into place here in the next couple of quarters.
Okay. No, thanks a lot for your time, guys. I appreciate it.
Thanks, Ryan.
Again ladies and gentlemen to ask a question at this time please press star one on your telephone keypad. Up next, we have Steven Fine. Steven Fine, please state your question.
How are you guys?
Morning.
Glad to hear everyone's okay. Hi, how are you doing? What's an IDIQ? I never heard that term.
Okay.
IDIQ.
IDIQ is Indefinite Delivery, Indefinite Q uantity contract. It's like what they call a MATOC, which is a Multi-Award Task Order Contract. Basically, what the government does is they'll award to somewhere between three and 10 contractors. What the value of that is, Steven, is when they make those awards, then they don't have to shoot out full RFPs for every project. They basically pre-qualify you on your experience, on your financials, your capability and all that, and they just send out a scope of work and a price sheet, and you can do task orders very quickly for a predefined or pre-qualified group of bidders or companies. It's a way to accelerate contracts that have lots of different task orders to go through them or projects to go through them in the next five years kind of a thing.
When you win a contract like that, an IDIQ, you don't win any value. We don't take value on it. You are in a position with reduced competition and reduced investment for when the task orders come out. You can bid quickly, they award quickly.
All right.
it's not a big investment.
All right. The $5 million that was forgiven, was that money used up? Is that money there, or was it used up?
Well, it wasn't a timing thing. We got it last year. We got it in April of 2020, and we're at $7.3 now. It just was all part of the bank account.
There's actually cash there, or is this an accounting thing?
No. The cash balance on the balance sheet is a cash balance, yeah.
All right. While I have you, Ben, when you mention there's a $30 million backlog for service, is that supposedly going to be multi-quarter business or just the next quarter or this quarter?
Yes. That is all our projects at the point in time, and therefore, some contracts might be, they may run over a year, a year and a half, others may be short burn. That really doesn't give you an indication of.
Yes. That doesn't give you an idea. All right. The other question is, when you were talking about your cost of goods, you mentioned that there is cost related to bidding. How much is that?
That would be in the G&A, not the bidding.
Yeah.
We were about $300 thousand over from prior year.
Okay.
A large chunk of that is twofold. One, as Mark mentioned a few times, the bidding activity was pretty intense, we had to bring in help, outside contract costs. The other piece of that, and it kind of goes back to an earlier question about managing our G&A. Many times we'll bring in costs related that would be billable in other times, and that increases the G&A number because you use them on a bid and proposal project.
When a new project comes in, they move into cost of goods sold and are tied to revenue. That kind of is another way that it manages your G&A costs.
Got it. Okay. I guess I'll direct this to Mark. Understanding everything that's going on, do you think it's feasible that we equal last year, this year? Do $100 million?
Steve, I don't believe $100 million is attainable this year.
Okay.
Based on what's happening with COVID right now in Q3. You would've asked me last quarter, I probably would've felt a little bit more optimistic about it, but DOE is kind of doing a wait and see on where things are with getting back in the field to a certain degree. Having said all that, I think we can get real close to a fourth quarter that would represent $100 million burn. In other words, $25 million in that quarter.
Right.
I think it's attainable. Yeah. If they get some things awarded.
All right.
We're on the winning end of them.
With regard to COVID, are you requiring your people to get vaccinated?
I was wondering if we'd get that question, Steve. It took a while to get to that question. We are not at this point. We are on that path. We're heading in that direction, and we're waiting for a couple things to happen. Right now, we just did a survey internally, and we're in about the mid-70% vaccinated, which is pretty far above the national average. We have about 15% of our staff that in that survey have said that they intend to get vaccinated. I feel confident that we can be in the mid-80s% vaccinated in the next couple weeks based on that survey. Having said that, I'm pretty comfortable there. We don't have a lot of cases overall in the company, but we do in the areas that we live in.
Having said all that, if the government goes to a mandate, we'll likely follow those mandates. Right now, you've probably heard the Biden administration.
Yeah, they are.
Yeah. If the government has it for their government contractors, I can't say for certain that we would implement right away, but I certainly think it's highly likely we will.
I thought I incurred that they were required in the military to be, but wherever you are, for lack of a better word, politically, and with all that's going on, and you got enough troubles with the business and so forth. Certainly, one would not throw into the pot, one would think, the possibility that somebody unvaccinated could impact your crippled operation at this point. I'm very strong on that being essential. All right. You have business out in, what was it, transuranic? Was that it, that you would get from CH2M out in Hanford? Is that true? That's past it.
That is true.
You get business from.
Yeah.
Are you getting that back or what?
No. What happened was, is they changed contractors out there on that plateau contract at Hanford, which is an enormous contract, as you know. The administration has changed in headquarters, new headquarters, and they determined they need to make some adjustments to the way they ship waste, which is not a big adjustment, but it does require some permit changes. These permit changes have been ongoing for shipping. Those are expected to be in place in the next month or two. Once those are done, they'll start to resume shipping again for the Transuranic. That's been a very big impact to us overall, to get that program back in place. We're optimistic that that'll be in place in September timeframe, maybe October, and get back to normal those shipments.
Just as a, I guess, for lack of a better word, a sarcastic comment. I note that the new contract winner for that, the old CH2M includes people from AECOM who, at least from my read, have been obstructive to you in the past. If I'm out of line, I'm out of line. All right. With regard to the TBI, why all of a sudden? If you did the three gallons, you did not do an environmental study before the three gallons? I mean, why all of a sudden do they want an environmental study for the 2,000 gallons?
I'm trying to recall. Lou, was there an EA for the three gallons? Do you remember?
No. DOE determined they didn't need it for that size project, it is not required for the three gallons.
It was a FONSI, yes. A Finding of No Significant Impact because it was so small. That's right, yeah.
Okay. Well, I just find, and these are my statements. I just find this whole situation, the deeper I get in, insane. There was, in May of this year, was it Gary Petersen and Bob Ferguson came out with an article in the paper out in the Tri-City paper. In there, they point out that the present vitrification plant is dysfunctional, that it'll create a gallon of waste for every gallon that they treat. With the escalating costs and so forth, if that's so, the whole thing, it's just insane and absolutely makes no sense. We're witnessing the effects of climate change, which one reasonable person would think would continue. Where are they going to find money to pay extra money that's obviously, the cost has escalated there?
I think, what is it, two years ago, they said it went up to about $400 million or $500 million or $1 billion. With all the money that's been pumped in the economy, I guess it'll be more expensive. The whole thing to me just doesn't make sense. It's insane. It's just insane what you can offer. From what I understand, the process has been proven in Savannah. The science is proven. It just seems to me, maybe, again, being cynical, that people do not want you to succeed. I made my comments. Clearly, the world out there wants vitrification, whether it's real or not. My last question, which I didn't understand, is you spoke about a TSCR system versus, what is that? The AVANTech system? What's a TSCR system?
Thanks, Steven, for pointing that out. I didn't mention TSCR. That's an acronym that I'm sure very few people know about. It's the Tank Side Cesium Removal system, which is a very well-engineered system that DOE and its contractors have developed, to remove tank waste quickly and efficiently and take out some of the higher level radionuclides of cesium and iodine out of the process stream. In other words, as the waste is rising through the system, it will remove it through an ion exchange system. What that does is takes out some of the radionuclides so that we can call this low-level waste and send it to us to treat it. That system, which is very similar to the one at Savannah River that you just mentioned, is operating very well, is in development and testing at Hanford now.
That system could be used to extract tank waste very quickly and efficiently once it is gone through the readiness process and demonstration process. We could put the system in that was designed for this application, just for us. Either way, we will take the 2,000 gallons however we can get it, the TSCR system, which is the one they are developing now, would be very efficient and would demonstrate how it works, and could be used very efficiently, and provide the opportunity to keep the waste coming, after they do the demonstration.
My readings were, is this TSCR system next to the tank?
Yes.
How does this differ? I've read that they actually approved the AVANTech system, and I read an article subsequent to that where supposedly they purchased huge containers where they were going to store the waste into the containers, and then it would go for treatment. Is that the same thing we're talking about?
That's the same thing we're talking about, yeah.
Okay. All right. I guess I think you guys, your attitude is great. It's a tough area, and I applaud the effort and everything. This TBI thing disturbs me because number one, even if you looked at this as a support function for the Vit Plant, which as I understand, is not going to be even big enough to handle everything. A smart businessman would have a backup. The way this has moved, the way this is structured after all this time, this to me, reminds me of how long it took you to get to three gallons, and we're talking next summer. Why next summer? I mean, why can't there be a little urgency? Again, that's my thought process.
My hope is with all this other stuff you're doing, that you'll become a $200 million company by the end of 2022 or thereabout, and, if something like this happens, it happens, and so forth. Again, look, it's tough times. I applaud you guys. I most importantly applaud your attitude. I think your attitude's fabulous. You're looking ahead. You've gone through tough times, and just keep it up because the old story is, the people win when you're there in the end, who don't give up. Thank you all.
Thank you, Steve. I appreciate the kind words.
There are no further questions at this time. Ladies and gentlemen, this does conclude today's Q&A. I would now like to turn the call over to management for any closing remarks.
All right. Thank you very much. As we said, we remain extremely bullish on the outlook for business and believe we're extremely well positioned for growth. We appreciate the continued support of our shareholders and look forward to providing further updates as developments unfold.