Good morning, ladies and gentlemen, and welcome to the Perma-Fix Q3 2022 conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. David Waldman. Sir, the floor is yours.
Thank you, and good morning, everyone, and welcome to Perma-Fix Environmental Services Q3 2022 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 Q3 2022 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 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 U.S. 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. 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, and good morning. We are very proud of our managers and staff that have worked extremely hard the past few quarters to continue our journey to reach the growth that we established before COVID and position the company for the growth trajectory our shareholders expect. Specifically, we continue to realize improvements in our performance as the pandemic impacts continue to subside, which was evidenced by our results over the last 2 quarters. I'm pleased to report we achieved a 17% increase in revenue to $18.5 million for the Q3 of 2022 versus a $15.8 million quarter for the same period last year. In addition to our revenue growth, gross profits increased by 38%, and gross margins increased from 14% to 17%.
Turning first to our services segment, we reached full operational status on several projects that have been delayed due to the impacts from the pandemic, which contributed to our revenue growth within our services segment in the Q3 of 2022. As we stated previously, the federal government agencies, including DOE, DOD, and the EPA, have been slow to procure new task orders due to the pandemic. However, these projects have not gone away. In fact, the federal government has begun announcing new projects that have been on hold. As a result, we realized an increase in procurements in September of 2022, which we believe will continue in the Q4 of 2022. Moreover, we're encouraged by the bidding pipeline, with many of these contracts expected to be awarded over the next few quarters.
Specifically, we have over $100 million in defined opportunities targeted to be released in the next few quarters that directly align with our core competencies. This is on top of the $39 million in funded nuclear services contracts already in place, which bodes well for the balance of this year, and the following year. There is significant pent-up demand, and we expect to benefit from improved budgets, and carryover spending from the last year as well. Turning to our treatment segment, our revenue remained stable despite delays in waste shipments from certain customers at our Florida facility due to Hurricane Ian, 17% in the Q3 of 2022.
In addition, we're seeing improvement in all our waste receipts overall, including our new clients in both the commercial and international waste markets, which has increased 46% overall to $9.1 million. In addition, our waste treatment backlog is approximately $7.1 million. We're also seeing strong demand for waste treatment capacity as evidenced by a steady increase in requests for proposals, more RFPs received for bidding within the waste treatment segment. We received over 80 bid requests in the Q3 of 2022 alone, compared to 60 in the Q1 of 2022 this past year. This is a result of our efforts to broaden our client base into commercial utilities, the oil and gas industry, as well as other industrial markets.
Another example is our new vacuum thermal desorption system, where we completed startup in Q2. We're now starting to see strong demand for this system and services with receipts from several new clients, including government and commercial clients within the oil and gas industries. At the same time, we remain highly encouraged by the outlook of the Test Bed Initiative, or TBI, also known as the Low-Level Waste Off-site Disposal Project, in support of the DOE Hanford Tank Disposition Mission.
The TBI initiative, which is based on grouting technology, will continue to be a focus of Perma-Fix moving forward as a means of saving tens of billions of dollars in taxpayer dollars, as well as eliminating significant carbon emissions and reducing the schedules for Hanford cleanup actions. Grouting has been recognized as a preferred supplement to the current DOE strategy based on the DOE strategy, which is currently based on vitrification of tank waste at Hanford through their new facility called the Direct-Feed Low-Activity Waste Treatment Plant, or DFLAW, which continues to experience delays in its startup. Our TBI program continues to move forward, albeit much slower than anticipated, despite continued pressure on DOE from the U.S. Government Accountability Office, GAO, to make progress.
As stated, in the GAO report, recently published, the near-term reduction of the tank waste inventory through grouting could accelerate tank closures and save the government tens of billions of dollars while reducing the risk to the environment. We can do this grouting today with our existing capabilities. Moreover, the National Academy of Sciences continues to request that DOE would expedite initiatives for grouting as well. As it stands now, DOE stated in a September industry conference in D.C., that their intentions to submit the RD&D permit to the state is currently planned within the next 6 months of this government FY or by the end of our Q1. This submittal will trigger review and approval by the State of Washington, and support shipment of the 2,000 gallons, as well.
Also, we've seen continued support by Congress, including a bill recently introduced by Senators Paul and Hassan in September of this year to push DOE into making progress on grouting and specifically the off-site low-level waste disposal program. Perma-Fix maintains these grouting capabilities today at our Perma-Fix Northwest facility, which is in Richland, Washington, right near Hanford, and is permitted and outfitted to safely and compliantly treat up to 30,000 gallons per month, with the ability to expand to well over 1 million gallons annually while dramatically reducing the cost compared to vitrification. In addition to the TBI initiative, our teams continue to work very hard on securing transformative opportunities and wins that could lift Perma-Fix to a new level of revenue and income.
These opportunities include participation in large procurements such as the $45 billion Integrated Tank Disposition Contract, and the Operations and Site Mission Support Contract valued over $3 billion. Both of these opportunities are Department of Energy procurements that we are participating in as a team member. However, both of these are completely aligned with our strengths, and our innovations, in radiological protection, and in waste management. We are well positioned for several additional upcoming procurements and initiatives as well, with the U.S. Army Corps of Engineers, as well as the U.S. Navy ship decommissioning program and several other DOE sites, that are going to be procured in the next few quarters. Turning back to our financials for a moment.
Adjusted EBITDA improved to a loss of $374,000 compared to a loss of $798,000 in Q3 of 2021 last year. We believe we've weathered the worst of the storm due to COVID-19, and we expect improved activity from the federal government to procure new task orders as well very soon. To further enhance our competitive position in the market, we've made several adjustments to our budgets for the next year to trim general and administrative costs and to lower our overall indirect costs. These adjustments will reduce our overall operating costs while continuing to meet our ESG objectives and increase our competitive edge.
Overall, we've witnessed a solid year-over-year revenue growth and saw a meaningful improvement in gross margins based on current backlog and have identified opportunities over the next several quarters that we basically remain optimistic that we can achieve these growth goals and stability that we've realized prior to the pandemic. At the same time, we continue to invest in our capabilities and facilities, we build a solid foundation of growth and a highly scalable infrastructure. As a result, we believe we're in a great position to take advantage of the pent-up demand, and as we continue to increase revenues, we expect to benefit from the predicted cash flows within our services segment and high incremental margins within our treatment segment. Additionally, qualifying for the Employee Retention Credit helped with offsetting some of the losses incurred from the pandemic.
As a result, we believe we're well positioned for the balance of 2022, and we believe we're sufficiently capitalized to execute our business strategy in order to achieve profitability, and positive cash flow in 2023. We believe this foundation, coupled with expansion of our treatment capabilities, increased bidding opportunities, and improved federal budgets, will continue to support our ambitious growth objectives. On that note, I'll turn it over to Ben, who will discuss the financial results in a little more detail. Ben?
Thank you, Mark. I'll start with revenue. Our continuing operations for the Q3 was $18.5 million compared to last year's $15.8 million. That's an increase of $2.7 million or 17%. The revenue improvement came from the services segment, with our 2 large projects finally being fully operational. At this time last year, they were just beginning to ramp up. In the treatment segment, revenue was flat with prior year. However, last year's Q3 included a one-time request for equitable adjustment or REA, totaling $1.3 million. When you exclude that, it provides for a $1.3 million increase year-over-year, in the treatment segment as well. We saw growth there as well.
Year to date through September 30, revenue is below prior year by $1.2 million or 2.2%. This drop in revenue comes from the service segment, revenue was down $1.9 million versus last year. If you recall, the first couple quarters of this year were down due to the delays in the 2 large projects, and that was the main reason for the shortfall. Our gross profit for the quarter was $3.1 million, compared to $2.2 million in 2021. This improvement, which totals about $846,000, came from $1.4 million improvement in the services segment, resulting from both increased revenue and increased profitability on the projects compared to last year.
Offsetting this was a reduction in treatment segment's gross profit of $520. However, if you exclude the impact of the REA I mentioned earlier, treatment segment's gross profit improved year-over-year by about $766 thousand. For 9 months ended September 30, gross profit was $7.6 million compared to $5.5 million last year. As with the quarter, this increase came from the services segment with improved margin from projects, offset slightly by lower gross profit in the treatment segment, and again, due to the impact of the REA. As with the quarter, if you exclude the REA, treatment segment showed an improvement of about $609 thousand. Total SG&A for the quarter was $3.9 million, compared to $3.3 million in the Q3 of last year.
This increase of $581,000 relates primarily to increased payroll, travel, audit fees, and stock compensation. For the 9 months ended September 30th, SG&A expenses were $11 million compared to $9.6 million in prior year. Again, higher costs in marketing and payroll and benefits, audit fees, stock compensation, and other general office costs were the main drivers. Our net income attributable to common shareholders for the quarter was $664,000, compared to last year's net income of $1.4 million. Included in this year's net income is the Employee Retention Credit Mark mentioned earlier of $2 million, and included in last year's was a tax benefit adjustment of $2.4 million related to the release of a tax valuation allowance.
Our total basic income per share for the quarter was $0.05 compared to income per share of $0.11 in prior year. Our year-to-date basic loss per share at this point is $0.16 compared to income per share of $0.27 in 2021. Our adjusted EBITDA from continuing operations for the quarter, as defined in this morning's press release, was a loss of $374,000 compared to a loss last year of $798,000. Adjusted EBITDA year to date stands at $2.2 million compared to a loss of $3 million last year. Turning to the balance sheet, our cash on the balance sheet was $1.9 million compared to $4.4 million at year-end, reflecting the current year's losses, capital spending, and debt maintenance.
Our waste backlog at the end of September was $7.1 million, which is consistent with $7.1 million at the end of the year and $7.1 million in September of 2021. Our total debt at quarter end was $1.3 million, excluding debt issuance costs, which is primarily owed to PNC Bank. Next, I'll summarize our cash flow activity for the year. Our cash used by continuing operations is $334 thousand. Our cash used by discontinued operations is $559 thousand. Cash used for investing of continuing operations was $922 thousand, and that's primarily capital spending.
Finally, cash used for financing was $694 thousand, representing our monthly payments on the term loan and capital line of $375 thousand and payments related to finance lease liabilities and other debt of $297 thousand. With that, operator, I'll now turn the call over to questions.
Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Thank you. Our first question is coming from Howard Brous with Wellington Shields. Sir, please go ahead.
Just a few questions. Mark, Ben, Lou, I hope everybody is well with the family and with the firm.
Hi, Howard.
Anything new with the EPA contract with Navajo Nation?
Yeah, what you're referring to. Well, good morning, Howard Brous. It's good to hear from you. The EPA contract you're referring to is the abandoned uranium mine contract. It's an IDIQ, so it's basically 3 bidders.
We submitted, I wanna say, in Q2, and we were told when we submitted it was gonna be a rapid turnaround on announcement and startup. It was a fully funded project, and we've heard nothing from the EPA. Well, I wish I had a better answer for you. This is falling into one of those many contracts that we've bid on that have just slowed dramatically as a result of lethargic procurement processes within the government. No indication plus or minus or anything about that whole procurement. It's not canceled. It's still happening. It's just stuck in the procurement process, I'm afraid.
All right. You mentioned possible contracts with the Department of Defense, in particular the Navy. Can you give us more granularity as to what kind of ships, how big the contracts are, how long they last?
Yeah. There's a lot going on right there right now. They've been slow to define specific ships with one exception, that is the Enterprise. The Enterprise, which most people have heard of, is a large aircraft carrier, that they are going to have commercially decommissioned. They've laid that out in great detail in their EIS, or Environmental Impact Statement.
Right.
Including their procurement approach. We know that's coming out. We're meeting with team members right now in great detail. We're anticipating a draft RFP sometime in the early summer, probably a request for information maybe between now and then, and a final RFP within about a year. You know, that project, as stated in the EIS, is valued at about $650 million. I would anticipate it'd be well over $1 billion with everything included. There is gonna be a good bit of competition, but as you know, we are in this business in a big way, doing one of the few current radioactive or radiologically contaminated ship decommissioning projects right now at Norfolk. That ship project's going well.
We have good relationships with the client. We're making margin, and we're very well positioned for being a key team member on the Enterprise when that comes out next year. As I mentioned, I think on a few calls ago, the Navy had announced in a report, I believe it was a GAO report actually, that they have 48 ships coming out for decommissioning in the next 4 or 5 years. 12 of those are nuclear. They have not defined what's coming up next and outside of the Enterprise. Wish I had more detail for you, but I think the Navy's still working through the priorities on which ship is gonna come out next.
Let me address the tank disposition contract. My understanding it's to be released at $45 billion contract Q1 of 2023. Is that a fair comment?
That is a fair comment, Howard. In talking to DOE and also in a recent conference I referred to a few minutes ago in September, DOE said that they're shooting for the end to have it done by the end of the year, but it may be close. We expect it late December, early January.
If I can be facetious, the end of this year as opposed to another year.
It is. That's correct.
We've been waiting and getting older. Also my understanding about the vitrification plant in doing some interesting investigation, this is going to be fueled by diesel fuel to the tune of 6, 7, or 8 rail cars every day. Isn't that an EPA issue with the basically fuel oil being a dirty fuel?
You know, it is their design basis to heat and power those vitrification units with diesel, the way it's been designed from the beginning. It is an issue. It's obviously gonna get much more expensive. There's a significant carbon emission issue. There's all types of other considerations associated with that. That's one part of our selling point for grouting is that there's almost zero carbon emissions, and there's no heating even involved. There's a lot of advantages associated with that that are really important. You know, DOE's built a $15 billion facility. They wanna see it operate. Their position has been very vocal that they don't want anything to distract them to get it operational.
Right now it is being delayed again. We're optimistic that based on the GAO push, as well as the National Academy of Sciences push, and recently, as I mentioned in the notes, congressional push with the senators drafting a bill to push it, that eventually DOE is gonna make it a priority to supplement the DF-LAW facility with a grouting program. I think Congress is gonna wanna start seeing progress as well, and DOE could certainly start the closure of some of the tanks that they can right now, in parallel with the DF-LAW startup process. We're putting a lot of pressure on for this, you know, working our congressional delegations, and everything we possibly can to get that visibility there.
Hopefully DOE will be shipping the TBI waste and then following that quickly in operational mode to start closing tanks.
Well, for discussion purposes, let's assume the contract is let out Q1. There's a 30-day hiatus where the contract can be appealed. Is that a correct statement?
Yeah. It's not exactly 30 days. I think it's a 10-day protest period or something like that, 10 days after debrief. That depends on when you get your debrief. I think that's how it works. But certainly not an expert on that part. But to answer your question, there is a debrief period and a protest period that has to transpire. If there's no protest, then you begin transition. One could assume that it would be several months before transition could be started if there's no protest. And then all bets are off if there's a protest in regards to how long it might take to secure the contract and start transition. Yeah, we would expect that to happen in Q1 and probably into Q2.
Assuming that the contract is awarded, when would you, either winning or losing in terms of your team, have business in terms of revenue?
One could assume that if it's awarded around the first of the year, that whoever wins would start generating revenue in probably the June timeframe, maybe May, in regards to transition. Then in transition, I can't remember, however, I believe it's a 120-day transition, and then you're full bore after that. Probably Q3 really be seeing the revenue for the winning team if there's no protest.
All right. Let me back away and come back after other questions are asked. Thank you.
If I could, Howard, let me just expand on ITDC a little bit. I did want our investors to know that our growth plans, our infrastructure, our budgets and expectations have all been developed irrespective of that award for the tanks. While that award obviously be extremely transformative to us, if we are not awarded that, we do have our plan set up, assuming we haven't. In other words, all of our marketing initiatives, all of our other growth initiatives are all moving along. We're hopeful that irrespective of that win, you know, we're gonna be seeing the growth that we saw in prior to the pandemic.
We've been very intentional on that, and we're very optimistic about that overall. Hopefully we are selected. There's only 2 bidders, but I just wanted folks to know that we are well-positioned if we don't to continue with that growth strategy. We're making every effort to make that happen as well.
Let me ask you to add on to this discussion. Assuming your team loses, is there not a significant number of pieces of the business that you will get over time, even if your team loses as a sub-
That's exactly right, Howard. Specifically, for example, the DF-LAW facility, which will be operated by this contractor. When the DF-LAW facility is up and running, it'll transition from construction over to operations. The ITDC contractor will fire it up and operate it. And it'll generate when it's full capacity, several million gallons of waste a year, different types of waste. One of those is about 1 million gallons a year of effluent liquid that we would likely be the ones to treat. Now, again, we don't have a contract signed. However, it's a low-level wastewater, and that's what we do, you know, for the their just off-site. One could speculate we would be treating that waste.
There'll be other waste as well from ITDC that we anticipate to be treating, and have discussed those opportunities with the incumbent contractor now. Yes, to answer your question, we expect a significant amount of work from that operations as well as the other operations that are ongoing for the incumbent tank contractor or whoever wins the new one, irrespective of whether we're awarded or not.
All right. Thank you. I'll get back in line. Thank you.
All right.
Best of luck.
Thank you.
Mark, Ben, Lou, thank you.
Thanks, Howard.
Once again, if there are any remaining questions or comments, please press star one on your phone at this time. Our next question is coming from Ross Taylor with ARS Investment Partners. Please go ahead.
Thank you. Gentlemen, I'd like to go over a number of kind of initiatives. When you talk about, obviously, the tank project Hanford is a huge opportunity for the company, but I'd like to come back to that in a moment. Before that, talk about the various others scale-wise. You're initiating in Europe, you've got the Navy, you've got these other projects. Dollar-wise, I don't ask you to tell me how many dollars you see in each, but kind of in order of magnitude, how important are these others relative to each other and relative to Hanford?
Yeah, Ross, I'm glad you asked that because I do want people to have a perspective of Hanford. While Hanford has a high visibility and a very quick impact, we do have a number of other initiatives that are following in line with that. For example, we've just submitted a bid in Italy that will be between EUR 40 million and EUR 50 million over a 7-year period. Waiting to hear on that, and which should be announced in the next several months. We'll provide good solid backlog with good margins, and really leverage our plants here in the U.S. as well as potentially, as we've mentioned before, with Westinghouse in the U.K.
Open some markets in Europe as well, that will come directly from that. We have the Enterprise I mentioned, which would. I'm just speculating, Ross, but that would probably be about a, you know, $100 million type of opportunity for us out of that $1 billion. Very sustainable workload. As EIS says, they expect the Enterprise to be decommissioned from 2025 to 2029. Basically 4 or 5 years beginning in 2025. That process is going, and they are moving forward with that. You know, that's just something that'll be awarded in the near term.
The other bid we put in for, or as I referred to as OSMS, that's also an ongoing procurement, so we can't provide any details. We're providing a significant waste management solution to that. That would add almost as much revenue as the tank closure would. That one is, as I mentioned, ongoing in procurement right now, but should be awarded next summer, Q3 timeframe. We have about a half a dozen other jobs that we're putting together right now, in the $10 million-$20 million range. Some we've already submitted, some we're working on right now with clients directly.
We are making inroads on the commercial decommissioning side as well, which is a big opening market for us, which is just beginning to start. I can't speculate on what the values might look like in the next several quarters. A lot of other opportunities that are coming along. DOE is gonna be kind of flat for a while, but DOD is picking up. The Corps of Engineers also has 4 big jobs coming out of Buffalo District. Those range from $10 million to $150 million. A lot of other good jobs coming that are directly aligned with radiological waste management, which I know there's not a lot of players involved in that, so we should win our share of those.
We're optimistic that we'll have a good backlog outside of Hanford.
You walk me right to my next question, which is the competitive environment. When you're looking at things like the Enterprise, I mean, in Hanford, you're 1 of 2 . How many legitimate competitors are there for what you would be doing, for example, in the Enterprise? How many other players are out there? And also, do you think the Navy, I mean, they've got a lot of ships sitting around at this stage. They've decommissioned a fair number of ships, as you mentioned before, including, you know, nuclear ships. How many ships do you think could, or do they intend to be decommissioning on a run rate? You said 25-29 for the Enterprise. I would doubt that would be the only nuclear ship they would be decommissioning in that period.
Looking at the competitive environment and the capabilities, how competitive is this? I mean, are you competing against 1 or 2 other firms, or are you competing against 35 other firms that compete in your space?
Yeah. Right, right now, the GAO report had defined about a dozen ships in the next 5 years or 48 months, I think it was. That was written a year ago, I think it was. The clock's ticking on that. There's a good backlog overall besides the USS Enterprise. The USS Sam Rayburn's coming. I think it's a sub, and there's a couple other that they've mentioned are in the queue, but just aren't procured yet. To answer your question specifically, there's 2 other primary firms that have done the 2 other ships that have been procured that are in this space. However, firms that have done nuclear decommissioning in the past will be entering the market. We've met with several of them.
There's a number of what they call ship breakers that are in this market who do non-radiological ships most of the time and scrap them. You know, they've done a number of aircraft carriers in the past down in Texas and the ship breakers have done those ships for $1 each and you know, and made good money off the scrap. There's a lot of competitors out there. However, to answer your question specifically, there's a lot to a radiological ship in regards to how you do it and decontamination, nuclear waste, radiological considerations, training, and all kinds of other things and facilities that might be required as well. That limits the overall market significantly.
To answer your question, and it's total speculation, Ross, we don't know since we haven't been through or no one's been through this big procurement like this yet, but we would anticipate 3-5 teams putting bids together on this. You know, it will be. It's anticipated, Ross, to be a fixed price task. Not everyone's gonna have the stomach for a billion-dollar fixed price decommissioning project. I'm sure that'll limit some folks as well. Everyone's gonna wanna you know, dampen the risk overall.
Would you be limited to playing with only one team in this process, or are your skill sets and your capabilities unique enough that you might find more than one team wanting you on it?
Typically, it doesn't work to be on multiple teams, particularly if you have an innovation or a skilled workforce and a project description like we do in this situation, where you're so intimately involved in the development of the bid, and there's so much proprietary information relative to costing and technical approaches and that type of thing, that it's very seldom. I won't say never, but very seldom will you see someone be quote, "non-exclusive." I would not anticipate that to be the situation.
Okay. You said, basically, if you look at it, if you're figuring there could be 12 ships in the next 5 years, including Enterprise, you're likely looking at the fact that there'll be more than enough business in this area for every team.
I would certainly anticipate that. You know, it. There's a startup here that has to start becoming very obvious that we haven't seen a lot of yet. I don't know if it's more a COVID issue or priority issue within DOD. I think once it gets rolling, then you'll start to see them moving ships out for commercial decommissioning quickly. Yes, to answer your question. I do think it's gonna. Yeah.
Could you talk a little bit more about how you see Europe coming together? It's obviously a new area of initiative for you guys. It seems to be a pretty interesting one. You've talked about Italy, but can you talk about, you know, the competitive environment? Who's doing what you guys do in Europe right now, and how big and how powerful can that market be for you?
Well, it's still unfolding at this point. I will say the U.K. specifically has really started to move radiological waste out of storage and with the desire to stabilize it and destroy it for disposal. There's very few treatment plant and treatment opportunities, treatment capabilities, in Europe, as a whole. If there is, there's a few here and there that have that capability, but they're booked.
That's why it's opened it up to us so much, is to have our capabilities over here that's permitted, and we've built an infrastructure, which has been a big investment for us to ship over here, process and ship back. It requires a lot of permitting, a lot of logistics capabilities, and partners. We've proven that we can do it efficiently and safely and compliantly. That's as reactors are coming offline, as the cleanup initiatives start moving forward, that we're starting to see that grow. It's taken us a while to get our capabilities out there so that potential clients know who we are and what our capabilities are.
We've made those investments, which has supported our growth. This year, I think we'll close the books probably around $2 million in international shipments, but that's going up significantly for next year, particularly if we win that other job. Even notwithstanding that win, if we are selected, we do expect that number to go up by at least twice and maybe 3x . It's really starting to move based on where Europe is in their cleanup process, which is way behind the U.S., probably 20 years behind the U.S., maybe 25.
Interesting for them to be behind on an environmental issue.
Yeah, it is.
Listening to all of this talk, I'm really struck by the fact that you're talking about a lot of long-term programs, a lot of, you know, 4-year, 5-year type programs that are gonna roll to be, you know, decades or longer. Quite honestly, obviously, Hanford has the potential to be almost a perpetuity type scenario. Are we really waiting for something like Hanford to fall before we see consolidation in the industry?
I don't have a good answer for that, Ross. Overall, you know, I think there's a few consolidation moves that are occurring here and there, but not much. One reason is DOE is demonstrating, this is just my opinion, is that they're spreading some of the wealth around as far as their awards. If you look at the awards that have been made, and the players that are involved, I think DOE sees it's important to ensure there's a number of competitors. Each one of the big boys that are bidding on these big jobs have something different to offer DOE in regards to key people and infrastructure and innovations and cultures and those kinds of things. I think DOE wants to maintain that.
Now, obviously, DOE doesn't have any control over the overall market in regards to M&A and that type of thing. As long as it keeps spreading around here and there, I think that there'll be 4 or 5 big players, maybe 6, that are well positioned to play in the market and maintain the bench that you need to have to win these big jobs. I don't see it changing a lot at the big level. At the smaller level, like our level, there has been some consolidation movement in regards to waste and I think that that will continue in the future with healthy companies.
Has anyone approached you guys?
Well, we can't talk about that specifically, but you know, we're always for sale. You know, we're a public company, and our focus has been squarely on getting our EBITDA back up into positive numbers after the COVID impacts. You know, if you look at our 2019 and 2020 numbers, we grew by 50% revenue a year for 2 years, and we were looking really good for the remaining years, and then COVID. COVID had a big impact on us. We're just now getting our feet back under us. We're expecting 2023 to look a lot better and to get back on that track. And then I think we'll be more attractive.
Certainly it's no secret that a $100 million market cap company has a difficult time, you know, with making the EBITDA you would have relative to being larger or being private or being a bolt-on to somebody else. Our focus clearly is just on getting our EBITDA back positive again.
Well, it does seem first, anyone who knows me knows I take no comment as confirmed yeses unless otherwise denied. I think that what I'm hearing you say is that you guys, that really the core business having been derailed is, you know, the train is being put back on the tracks, and really in the next year, we should have visibility to some really powerful top and bottom lines and free cash flow drivers that they might not be generating free cash flow by the end of 2023, but we should have a really good view on the power they're gonna produce as we move into 2024 and beyond. Would that be-
That's a safe statement. I think it's a safe statement, Ross.
Okay. I mean, I think you guys are. You know, it's been tough. You guys are doing a great job, and I think we're kind of sitting here with a market that is focused, kind of is staring at its toes and not looking out very far. It strikes me as that if you look out much on the horizon at all, you know, 6, 9 months, you're gonna see a totally different company than you see today.
I hope so.
Yeah, definitely. Well, keep up the good work.
Thank you.
You've done a great job opening up opportunities that weren't there before, and it looks like pretty much you should be able to do nicely given the setup I see. Thank you.
Thank you.
Take care.
Thank you.
Thank you. Our next question is coming from Bill Nasgovitz with Heartland Advisors. Please go ahead.
Yes, good morning, Mark. Congratulations on profitability.
Thank you, Bill. It's good to hear from you.
Yeah. Also increased sales. I might have missed the backlog. Treatment backlog is $7.1 million, and service is how much?
It is 39 point-
39. What was it in the Q2?
48. Is that 48, right, Ben? Ben can look it up real quick.
Yeah, it was 48.
With all of this RFP action and bidding potential, how come our backlog is not growing on the service side?
Well, you know, we look at our last couple quarters, Bill, or in regards to services, we have submitted. I don't have the numbers in front of me, dozens of proposals. There's a few that we submitted that were not necessarily radiological waste, for example, just decommissioning job or demo jobs that were not squarely in our core competencies. Notwithstanding those, we haven't lost much. We've submitted a bunch of bids. I wanna say, we have almost $400 million in bids that we've submitted in the last year. Maybe it's closer to $500 million. Now some of those are skewed by Hanford.
You take out the big Hanford jobs, and it's probably about $100 million, I'm estimating, in projects in our core competencies that have not been awarded. That's what's been difficult. We haven't won or lost projects in Q3 with exception of this MATOC I've mentioned. We're waiting on a lot of procurements to be awarded. That's why our backlog hasn't moved.
Okay. All right.
We haven't been able to have a press release. Go ahead, Bill.
Well, possibly there could be tremendous upside here if in fact these contracts are ever let. Is that a fair statement?
Either let or award. Ones we've already submitted and are awarded, yes. Either let-
Okay.
By RFPs or awarded by-
Awarded. Okay.
Yeah.
Well, fantastic. Ben also alluded to cutting costs and your focus on profitability, EBITDA, and all that good stuff. What's the goal? How much, what do you expect to cut, you know, for the coming year, this year?
Well, I don't know how much we should get into. We've got to be careful 'cause it's a competitive,
Well, let's put it this way. Roughly for the quarter we did $9 million in services, and we did $9 million in treatment, roughly, round numbers. Is that a level that we can continue to make money on going forward?
No, we have to grow. Our goal is to get to $10 million in revenue in the waste treatment segment, and a total of $60 million in revenue annually for services. $100 million is our sweet spot. We make good money at $100 million. We did before. To answer your question, you know, in reductions of SG&A, we have a very well-defined plan. Let me just say it's to reduce $several million in SG&A costs through 2023.
Okay.
That will put us in a position where even if we don't grow, Bill, to $100 million, that we'll see our EBITDA get quickly into the positive range.
Okay. That's by the end of 2023, you're talking a couple million dollars in SG&A costs?
Correct.
Is that what I heard you say? Okay, good.
Yes.
All right. Do you think that, when do you expect service to get back up to roughly $15 million a quarter?
Well, our goal is to make sure we're there by the end of the year, you know, which is $25 million a quarter by the end of 2023. You know, it's difficult to say because it gets back to your first question.
By the end of 2022 or 2020?
We expect to be tracking at $25 million a quarter by the end of 2023.
Okay.
Yeah. To answer your question, it depends in regard to your first question, and it's when are they gonna start awarding these bids? Like I said, we've got all these bids outstanding that have already been submitted. Several have said that they plan on awarding by the end of calendar year. Again, this is not the Hanford, the other ones. If we're successful in a few of those, we're there. With $39 million in backlog, which will pretty much run through the year, then we need $20 million in awards there for revenue in 2022, which-
Okay.
If we just win our share and they make the announcements, we should be there.
Okay. All right. Well, congratulations on a movement in the right direction. Certainly all shareholders are anxious to see sustained profitability. It's been a long, long road.
It has. We appreciate your patience.
Okay. Thank you.
Yeah.
Thank you. Sir, as there appear to be no further questions in queue, so I will hand back for any closing comments you wish to finish with.
All right. Thank you. I'd like to thank everyone for participating in our Q3 conference call. We remain extremely confident in the outlook of our business. We appreciate the continued support of our shareholders, and we look forward to further updates and developments as they unfold through the next quarter. Thank you.
Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation.