Everyone, welcome to the Perma-Fix Fiscal 2022 Year-End Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. 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 Waltman. Sir, the floor is yours.
Thank you, Matt. Good morning, everyone, welcome to Perma-Fix Environmental Services' fourth quarter year-end 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 fourth quarter 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 or 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 call 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, and good morning, everyone. 2022 was a transformative year as we built a solid foundation for growth in the upcoming year, and we're finally seeing a return to normalization and the momentum we had prior to the pandemic. The weakness in revenue we experienced in 2022 was due to the lingering effect of the COVID-19 pandemic on delaying some of the projects in the services and the treatment segments. Nevertheless, we achieved a 58% increase in gross profit in the fourth quarter, which was due to improved profitability in the services projects compared to last year. In addition, total gross profit margins increased from roughly 7% to 12%. While 2022 was a challenging year, we believe we're back on the growth trajectory, primarily due to the recent improvement we've seen in our treatment segment.
Within our treatment segment, we've experienced a steady improvement in waste receipts. Specifically, our average receipts per quarter have steadily returned to pre-pandemic levels over the last nine months of the year. This is best reflected in our backlog, which was $9.2 million at year-end, significantly higher than prior quarters. This was a result of increased waste shipments from DOE, as well as our efforts to broaden our client base into the commercial utility sector, as well as oil and gas and other industrial markets.
It's important to note that the fourth quarter of 2022 was negatively impacted by challenges associated with labor issues and high attrition rates due to the Department of Energy hiring campaigns at several of their sites, which are near our facilities, as well as supply chain impacts from availability of waste processing materials such as grout mix. We also experienced severe weather impacts due to record low temperatures in the Tri-Cities area of Washington. However, these issues have begun to subside in the first quarter of 2022, excuse me, fourth quarter of 2023, with hiring at each location realizing stability compared to the last two quarters. In addition, to the growth of our base business, we're rapidly advancing several initiatives that we believe have the potential to significantly enhance our revenues and our long-term backlog.
For instance, we've realized two important steps forward with the Department of Energy in pursuit of our Hanford initiatives that hold significant potential growth for many years. These initiatives include the January thirty-first amendment of the Record of Decision, or ROD, for the final tank closure and waste management EIS that was originally developed in 2013, as well as an announcement this past Friday for the notice of availability for the Waste Incidental to Reprocessing, what we call the WEIR, report, which is in support of the Test Bed Initiative demonstration, what we call TBI. First, I'll touch base on the first amendment.
The amendment up to the ROD for the Direct Feed Low-Activity, which we'll refer to as the DFLAW facility, supports the secondary waste program at the Hanford Site in Washington, represents a sizable opportunity over the next decade. While we can't provide too many specifics at this time, suffice to say that Perma-Fix will provide the recommended treatment solutions for radioactive waste streams produced by the DFL program once it gets operational. This waste is estimated by DOE to be over 8,000 cubic meters annually, will begin to be received at Perma-Fix facilities upon hot startup of the plant, currently projected to begin in the late 2024 timeframe. To put this in perspective, this volume of waste would more than double the production of all of our plants combined on an annual basis.
Given the fixed cost nature of our business, this could result in very significant cash flows over the next 10-year period. The second step forward, as I mentioned, is the final Waste Incidental to Reprocessing, or WIR document, published this week by DOE, which states that the program or the proposed TBI program would demonstrate a supplemental LAW treatment approach. The WIR went on to state that based on the final evaluation, DOE determined that the pretreated and solidified waste from the tanks is incidental to reprocessing of spent nuclear fuel, is not high-level waste, and is to be managed as low-level waste. This progress opens the door for DOE to work with the Washington State Department of Ecology, which is a regulator, to develop and approve the regulatory documents for shipment of the phase II program.
Phase II includes grouting disposal of 2,000 gal of tank waste currently anticipated to be shipped before the end of the year. These developments underscore the important role that Perma-Fix will be playing in the long-term mission for Hanford closure in support of both the DFL of vitrification program as well as the supplemental tank waste treatment program that will likely include commercial grouting. As discussed last quarter, the TBI initiative holds the potential to save tens of billions of taxpayer dollars, as well as eliminate significant carbon emissions and reduce schedules for Hanford cleanup. Perma-Fix maintains these capabilities today at our Perma-Fix Northwest facility, which is permitted and outfitted to safely and compliantly grout up to 30,000 gal a month, with the ability to expand well over 1 million gal annually while dramatically reducing costs compared to vitrification.
Within the services segment, we've reached full operational status on several projects that have been delayed due to the impact of the pandemic. Additionally, we've secured important new projects that we expect will begin in the 2nd quarter of 2023. As the impacts from the pandemic continue to fade, the federal government has begun to announce new projects that have been on hold. These procurement cycles are moving forward to support the increased funding levels, which we anticipate will result in a number of additional opportunities to be awarded in the coming quarters. We have now over $200 million in defined procurement opportunities targeted to be released in the next few quarters. We continue to await some very large potential strategic awards by the DOE.
Some of these projects are quite considerable in size, and if selected by DOE, would represent substantial increases in sustainable revenue to align with our core competencies. Some of these upcoming DOE project announcements include the $45 billion Hanford Integrated Tank Disposition Contract and the $3 billion Operations of the Site Mission Support Project, which are both likely to be awarded in the second quarter. If we are successful, we would participate as a team member on these large DOE procurements, both of which completely align with our strengths and innovations in radiological protection and waste management.
We're also close to announcement of another project that we've referred to in past calls through the Joint Research Centre in Italy, which this project would support our expansion program in Europe and open the door for deployment of our treatment technologies in these rapidly growing markets in Europe. We've also received several excuse me, strategic awards over the past few months, specifically associated with our SoilSor technology, including announcement last week that our team was awarded the first abandoned uranium mine closure task order in support of the new EPA abandoned mine program. While this initial task order represents only about $1 million in revenue for 2023, we're anticipating rapid expansion of the program following deployment of our technology into the first site, which is located in the Northeast Arizona region.
Awards have also been realized at several DOE locations that will support backlog generation in 2023. In addition, we're well positioned for several upcoming procurement initiatives for the U.S. Army Corps of Engineers, the U.S. Navy, and several other DOE site projects that are supposed to be secured in the next few quarters. As a result of these factors, it's clear to us that there is significant pent-up demand and that we expect the benefit from improved budgets and carryover spending from last year. As a result, we maintain an optimistic view that 2023 will see a significant improvement over 2022. As I mentioned earlier, we're already seeing signs of that improvement.
Turning back to our financials for a moment, adjusted EBITDA for Q4 2022 improved to a loss of $1 million compared to a loss of 1.7 the prior year Q4 2021. Aside from our expectations of solid revenue growth having a positive impact on our EBITDA going forward, we continue to focus on a reduction of non-billable indirect operating costs, as well as SG&A expenses. As a result, we anticipate a meaningful improvement in profitability and cash flow going forward. At the same time, we continue to invest in our capabilities and our facilities. We've built a solid foundation for 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 that we've mentioned.
As we continue to increase revenues, we expect to benefit from the predictable cash flows within our services segment and high incremental margins from our treatment segment. Overall, we remain confident in our ability to achieve the growth and stability we experienced prior to the pandemic, given our increasing backlog, our solid pipeline of nuclear services projects, and several potentially transformative events we've mentioned that could materialize over the next coming months and years. On that note, I'll now turn it over to Ben, who will discuss our financial results in a little more detail. Ben?
Thank you, Mark. Let's start with revenue. Our total revenue from continuing operations for the quarter was $16.8 million, compared to last year's fourth quarter of $17.1 million, a decrease of $359,000 or 2.1%. The decrease was primarily due to a drop in our treatment segment revenue of about $290,000. Despite a good quarter on the waste receipt side, processing, as you mentioned, was impacted by supply chain, labor, and inclement weather. Despite these delays, volume did have a positive impact on revenue, but there was a offset from lower average pricing, and that's not uncommon. It's just related to waste mix. In the service segment, revenue was down slightly by $69,000, and that's really just timing of on-site projects.
For the year ended 2022, our revenue was $70.6 million compared to $72.2 million last year. In the treatment segment, revenue increased slightly by $366,000 due to higher waste volume, offset by lower average pricing as with the quarter. On the service segment revenue, it was down by $2 million, primarily from the slow start in the first quarter of two of our larger projects, the productivity ramped up production in Q2 through Q4. On the gross profit side, gross profit for the quarter was $2 million compared to $1.3 million in 2021.
The increase in gross profit of approximately $741,000 was from the services segment, which was a result of improved profitability of our current projects worked on, which included a 19.8% reduction in project-related variable costs. This improvement was offset by a reduction in gross profit from the treatment segment due to the processing delays we discussed previously, as well as an increase in fixed expenses at the plants related to labor and utilities. For the year ended 2022, the gross profit was $9.6 million compared to $6.8 million in 2021. This improvement in gross profit came from the services segment, where, again, the improved project profitability contributed $4.7 million in improved gross profit, and that was offset by a small decrease in the gross profit from lower revenue.
This increase in gross profit in the service segment was offset by the decrease in treatment segment, again, from lower revenue waste mix or lower margin w-mix of waste and the increased facility costs. Our total G&A for the quarter was $3.6 million compared to $3.3 million in the fourth quarter last year. While SG&A for the full year was $14.7 million compared to $12.8 million in 2021. SG&A expenses for the quarter were higher as marketing expenses were up from increased payroll, trade show expenses and commissions earned. Admin expenses for the quarter were higher from higher payroll benefits, audit fees, write-off of patents and stock option compensation, as well as Perma-Fix medical costs, which are no longer absorbed by our previous medical segment.
Similar to the quarter, our G&A costs were up for the year in marketing from payroll and trade show and travel. Admin expenses were higher due to audit, outside services and increased payroll costs no longer absorbed by the medical segment. Our net loss attributable to common shareholders for the quarter was $1.7 million, compared to last year's net loss of $2.5 million. For the year ended December 31, 2022, our net loss attributable to common shareholders was $3.8 million, compared to net income of $835,000 in prior year. Our basic and diluted net loss per share for the quarter was $0.13 compared to loss of $0.19 in the prior year. Loss per share for the year ended December 31 was $0.29 per share compared to income of $0.07 in the prior year.
Adjusted EBITDA from continuing operations, as we defined in this morning's press release, was a loss of $1 million compared to a loss of $1.7 million last year. For the year ended 2022, adjusted EBITDA was a loss of $3.3 million compared to a loss of $4.4 million in 2021. 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 losses for the year. Our accounts receivable were down $2 million, reflecting improved collections primarily in the service segment. Our unbilled receivables were down $2.9 million, reflecting increased billing in a large project that was nearing completion.
Other assets were up $1.1 million, partially due to the Employee Retention Credit of $2 million, which is still outstanding. Our current liabilities were down $3.2 million from payment of outstanding payables and the reduction in unearned revenue of approximately $767,000. As of December 2022, our treatment backlog sits at $9.2 million, up from $7.1 million, both at year-end 2021 and September of 2022. Our total debt for the quarter end was $1 million, excluding debt issuance costs, which is mostly owed to PNC Bank. Finally, on the cash flow side, for 2022, our cash provided by continuing operations came in at $164,000. Cash used by discontinued operations was $717,000.
Cash used for investing of continuing operations was $997,000, primarily capital related. Cash used for financing was $921,000, representing payments to our term loan and capital line of $502,000, and payments related to finance lease liabilities and other debt, of approximately $419,000. With that, operator, I'll now turn the call over to questions.
Certainly. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speaker phone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Howard Brous from Wellington Shields. Your line is live.
Thank you. Mark, Ben, Lou, I hope you and your families are doing well.
Hey, Howard.
Morning, Howard.
Morning. First things first, for full disclosure, I need to say that I was the investment banker for your equity raise of $6.2 million, September 2021. In addition, members of my immediate family own shares in Perma-Fix. Let me get to a couple of important questions. The Department of Energy just published various comments relating to DFLAW. The Record of Decision specifically mentions, and only mentions, Perma-Fix Northwest as the facility to treat which seems to be enormous quantities of secondary waste. They talk about 8,300 cubic meters of solid and liquid waste annually, which if I converted that to liquid, which I have questions about, that's about 2.2 million gal of, if it's liquid waste. 18 cubic meters of mid-level waste and 332 cubic meters of mid-level waste.
Because it's a combination of liquids and solids, can you give me a sense of what the annual revenues to Perma-Fix could be starting if you're operational in 2025, as an example?
Sure, Howard. Yeah, you really can't do a real conversion of those quantities because a lot of that 8,300 cubic meters is debris or other solid waste like PPE or personal protective equipment.
Right
Other things that get contaminated, those kinds of things. It's difficult to do that. We looked at the various types of waste to be generated, compared it to what we do now. As I've mentioned before in the script, it's about double our total input now for waste, all of our plants combined. We do have. I do want to mention, we do have a contract with the tank contractor that will likely be novated, and that it's like it's an MSA, a master services agreement type of contract. It's got rates, and we've talked about rates. Applying our rates to the volumes of each individual waste stream, looks to be about an annual revenue between $65 million-$75 million a year.
It is a significant increase in revenue for that plant and the company overall. That $65 million-$75 million could vary, you know, depending on how much of which waste stream changes along the way. It also very dependent on the radionuclide content that was received. You know, there's the different charges for different types of levels of rate activity and those types of things. Generally, when that plant is running, the effluent plant is running at full capacity, which is right now, understand the design capacity for the plant is to treat 1 million gal a year. When it gets to that level, I think we'll be able to expect, you know, over 8,000 cubic meters a year.
Basically, this will be at your normalized treatment margin. Is that a correct statement?
Most generally, yeah. You know, there's some inflation obviously that's gonna have to occur along the way. The, the natural gas prices in the Tri-Cities area have gone up dramatically compared to the rest of the country, and things like that and labor issues. Yeah, generally, the margins will be what we make now on waste treatment, as a whole.
Will you need to hire any additional personnel for this specific award?
Yeah. There will be. you know, this will be expected, as I mentioned, in the script. Right now, DOE is very casual or I should say informal about when the startup of the plant will occur. The predicting at this point in time, that'll be late 2024. Then it'll get rolling through 2025. I would expect them to take a year and a half to get to full capacity if everything went well. I'm sorry, what was your question, Howard? I'm already...
No.
Today's question.
Additional personnel.
...additional personnel. Yeah. At full capacity, I would anticipate, between 70-75 maybe and 100 people.
Additional?
Yeah. Additional to current staff, correct?
What you're basically talking about, if I do some numbers, you're talking about earnings just in this contract fully deployed in, say, 2025, almost, $3 in earnings. Does that sound about right?
I'm not qualified at this point to do that math, not that I should be qualified. I haven't done that math. It sounds about like it might be about the right number, generally.
Okay. Let me continue because the DOE has published probably 1,500 different pages of items. Let's talk about the TBI. What's interesting about the TBI comment, 2,000 gal, assuming that's done by the end of the year, they also mentioned that they have no desire, and this is in the document Waste Incidental to Reprocessing Evaluation for the Test Bed Initiative Demonstration. This came out March sixteenth. On pages four to 20, 21, and 22, effectively, they have said that they have no desire to do what you and I would look at as the third phase of 300,000 gal. This does imply that they're looking to go from the 2,000 gal, assuming it's successful, right to full capacity. I'd like your comment about that.
We've had a number of meetings with DOE in the last few weeks about the overall TBI program and have asked before about that. DOE's response has generally been the same as have been and as I've described on prior phone calls, and that is that they have a road map that they refer to which integrates their strategy for tank cleanup. Includes, you know, it's largely based on the DFLAW facility, you know, which DOE has $14 billion invested in and obviously decades of construction. Getting that plant up and running, and that's kind of the centerpiece of it. TBI and grouting certainly fits into that road map, as they refer to it.
When it occurs, is gonna be dependent on when DFLAW gets rolling, funding, how the DFLAW facility works, other types of regulatory considerations, and those types of things. In their response to whether they're gonna go to 300,000 gal versus right into a production level, I don't think DOE's made that decision yet. Whether they call it TBI or low-level waste off-site disposition, which is what they refer to congressionally, that remains to be seen. The supplemental program for grouting is certainly seems to be and I've been told is a part of that overall road map.
To answer your question, Howard, whether it's 300,000 gal as phase III of TBI or whether it's moving right into an operational phase, DOE has laid the groundwork so far from a regulatory perspective through the WEIR that you mentioned, and also through the environmental assessment to support their NEPA requirements. Those have all been done. They have another hurdle to address, which is a smaller hurdle, with the state of Washington for their RD&D permit, which is required to pump the waste out of the tank to ship to us. Once that's done, they can start going. As you know, there's another method of that they're pumping out now through what they call the TISCR. The TISCR is pumping.
Right.
-waste. DOE has planned on pumping 800,000 gal this calendar year with that, and putting it in storage for DFLAW. Once that gets full, I think there's, you know, an opportunity to also grout some of that. DOE has not agreed to that yet, but, you know, depends on when DFLAW gets up and running. You know, if it's just around the corner or if it's a good ways off, I'm sure there'll be opportunities to talk to DOE about that potential as well. To answer your question specifically, I don't think DOE's has given a lot of consideration to whether it's phase III of TBI or whether it's right in an operational phase.
On an operational phase, what kind of capacity could you use or excuse me, work on in terms of, say, 2025?
Yeah, we could do 30,000 gal a month tomorrow. Our permits and our facilities support that throughput. We can expand that through a minor permit mod and some minor capital improvements up to 1 million. With some additional mods, you can get that up to several million. Right now, about 300,000 gal a year is what our current capacity is whenever DOE is ready to go.
This is standard treatment margins again?
Yeah. That's correct.
Would you need additional people to process this?
Up to 300,000 gal would be about 25 people total to run that operation. A lot of that depends on how fast we're receiving the waste, whether we go to a second shift or a third shift or whether it's over a longer period of time, which we can do on the one shift. That'll vary, but 15 to 25 people is probably a good estimate if we were running at full 30,000 gal a month.
30,000 gal a month. If you just did that, you're talking about $0.75 a share, give or take. Of course, full capacity, you can be talking about close to $1.00.
I certainly couldn't verify those numbers, Howard, but that sounds like potentially about right.
All right. Everybody's gonna be wanting to talk to you, lastly about ITDC. We're expecting a decision momentarily. Is that a correct statement?
DOE has been very difficult to pin down in regards to their schedule and the procurement. Right now, DOE has been consistently saying, I've been hearing, that it'll be sometime by the end of Q1, which obviously is only a week away. I have to believe it's sometime in Q2 for both ITDC and the OSMS. OSMS, they have been more vocal about an award in the May timeframe, but the ITDC, I'm gonna assume, Howard, is any day, but likely in Q2 before, at least in April timeframe.
The OSMS is Paducah Portsmouth. Is that the one?
That's... Yes, that's the DUF6 -
Right
-management contract and as well as Portsmouth Paducah infrastructure contract together.
Assume for the moment that your group wins the ITDC contract, which we all hope to do. What does that mean to you other than 15 years and it's $45 billion? You're not doing $45 billion, what could you be doing as a part of it? The second question to that is, if you lose because you're a small business, will you still participate?
Yeah. It's very difficult to answer the first question, Howard.
Okay
A s I've told many investors, this procurement is quite unusual in that it's so large and so complex. DOE did not require a baseline schedule or a baseline cost estimate, which means that there's very little costing provided and very less detail on what each firm, each team member is doing specifically. It's like a closure contract in that the winner will negotiate task orders for all the components of scope during the transition period. At that time, you'll understand that which pieces of scope specifically you're gonna be contractually required to do, how many people are gonna come with it, and that type of thing. None of that will be defined by any of the winners until after transition's off and running.
I really can't answer what the overall financial impact is. As a small business, as I mentioned, as well in the past, there's a very significant small business set-aside requirement for the winner. It's a formula of overall revenue. Generally, the small business set-aside goals average about $200 million a year, $200 million annually, for small business goals. That's a pretty significant amount. You know, we still remain a small business qualified to do that. The second part of your question, if we were not selected, we would certainly be a very viable way for the winning team to meet their small business goals, as well as provide the value proposition we provided to our team.
We're highly optimistic that if we don't win, we'll be able to obtain a good portion of that work, if it's not already, accounted for by another team member.
I'll get back into queue. Mark, best of luck. Thank you.
Okay. Thank you, Howard.
Thank you. Your next question is coming from Aaron Warwick from Breakout Investors. Your line is live.
Hey, guys. Thanks for taking the call, and appreciate all of Howard's questions and your answers to those to give us more clarity. I wanted to talk about Hanford a little bit as well, but also wanted to look more near term and get some clarity. It sounds like the business has really turned a corner here after the pandemic. Just trying to get a sense of, do you expect to be profitable in this fiscal year?
Yeah. Q1 looks a lot better than Q4 did, Aaron. I appreciate your question. Q2 has a lot of things happening that are very exciting that are projected to be much better than Q1. We certainly expect to be profitable in Q2. Q1 is still a couple of things we're waiting to see come in. Q2 is very exciting. We have the EWOC facility here in Oak Ridge that we've been carrying for on lease for about three years now. It's finally starting to generate real revenue. We've got a big project we're doing there and several others pending.
That gets rolling or has gotten rolling here in the last 10 days and will run at full capacity just about through Q2. In addition to that, as I mentioned in the notes, we've won a number of projects that are all getting rolling in Q2 as well. That includes the abandoned uranium mines, as well as some commercial contracts, a project in San Diego with the Navy, and two or three new projects with DOE at different sites, so Los Alamos and Livermore, all are getting rolling in April. Q2 looks really good. Our backlog will be increasing.
Some of the headwinds I described before, which includes the labor and supply chain issues, are really behind us. We've replaced a lot of people that have been on board now for three or four months, so they're trained, they're rolling. We're pretty confident that Q2 will be well into profitable range moving forward.
Oh, fantastic. That sounds good. You mentioned the EPA, and I've noticed that they've been moving forward with a lot of different projects that have kind of been delayed because of COVID and other reasons. The project that you mentioned, if I remember right, you said it'll make probably $1 million this year, but if I remember right, that's like an $80 million contract over three years. Is that accurate?
Yeah. You know, Aaron, I believe that IDIQ is a $225 million IDIQ. There's three teams. We're with one of those teams providing waste management and radiological services, which is obviously what we do. It's really difficult to say. The last time we talked to EPA, which I've not talked to them myself, but our folks have, there's been about 12 sites teed up by the characterization contractor to bid out. They just haven't been through the procurement process. I don't know the size of those or timing or funding, but I know the ceiling is high.
is to get rolling on these things this year, and that's one reason why we're confident that with our technology and the SoilSor stuff, that it'll be very efficient, and we'll be able to once we get deployed in the field, we'll be able to keep it going. Right now we're only contractually, you know, signed up for that first task, but we're pretty confident that this thing's gonna grow because the contamination and the mission of this thing is so large
Okay. On the international front, you didn't mention anything about that, but it sounded promising the last several conference calls. What's the status of that work?
Yeah. I mentioned the JRC. I may I think I stumbled through that part of the script, Aaron. The JRC is the Italy contract that we're counting on-
Oh, okay.
-or hopeful for. Yeah. I don't know if that's where I broke down or not. The bottom line is we're expected to hear about the JRC bid any minute. As I mentioned before, that's, you know, it's nearly a $50 million job, and it will be kind of the seed for our overall European strategy. Overall, to answer your question, we continue to get shipments from Germany. We're working with one right now to be shipped any day from Croatia and Slovenia, as well as the U.K. and Italy.
The more we're shipping, the better we're getting at it and more efficient we're getting at it to deal with all the logistics and all the paperwork that goes with, you know, shipping radioactive material across the Atlantic. It is going very well. The market is really exploding. The marketing we've done has been very effective to the effect that we're getting the opportunity to bid on a lot of things. Hopefully we'll see that JRC announcement soon and then we'll start moving forward with the new plant in England, which will kind of be the centerpiece of our European approach.
Right. Okay. For Hanford, a couple of things. First of all, I was pleasantly surprised to hear, well, at least if I understood it correctly, that even if your bidding conglomerate were to lose, and it sounds like there's only two, but even if you were to lose, that you still may get some business because of that small business clause as part of the contract. Am I understanding that correct?
Yeah. That, I mean, that is speculation. You know, I don't know the landscape, if we were to lose, you know, who the winner is gonna have on their team necessarily. That's really just speculation. Yes, there'll be opportunities for that. Again, it's important to understand, as I've told investors, the ITDC is primarily labor. The waste will be separate. The waste. For example, the DFLAW is part of that contract to operate the DFLAW, and our waste will come out separately as a separate subcontract and not through the ITDC to us. There will be opportunity to do the waste that's defined in the ROD Amendment, which, you know, is slated to come our way once it gets operational.
There's other opportunities for other waste, that we'll likely get as well, there's other opportunities for labor, that, and other small business opportunities along the way. Yes, to answer your question, there will be opportunities as a small business, most likely, with the awardee.
Yeah. You had mentioned up to $200 million. That was about my estimate as well on, you know, obviously not necessarily every year, but on an annualized basis. I'm just wondering, that would go to small business. How many small businesses are there? There can't be that many small businesses there doing what you do. I just.
None of our competitor, our day-to-day competitors, which are WCS and, you know, EnergySolutions and those types of firms or private companies, none of those guys are small business. You're absolutely right. It was a very limited small business competition with waste treatment capability. There's a few. There's a couple here in Oak Ridge. There's really not any necessarily in the Hanford area to speak of at this point. But it's also very broad scopes. There's other things to do. But as far as what we do, there's very limited small business competition in this space.
Okay, thank you. Speaking of the larger competitors, some of them were mentioned in the final year for the TBI that you had talked about earlier, and that I think caught some people by surprise, that you were the only one that was mentioned in the one for secondary waste. Can you explain what the reasoning is behind that?
Yeah, I'm glad you asked that, Aaron, because I did get a couple questions about that this week. What it comes down to is the WEIR references the environmental assessment that was done for NEPA. The environmental assessment, the goal of that document is to evaluate alternatives for treatment of that tank waste and treatment disposal. When the EA looks at every alternative available that, you know, that's feasible, and it looks at the competition, which includes WCS and EnergySolutions and us. What that WEIR referred to was who was evaluated in the EA. If you look at the EA, there's a number of different, you know, evaluations done based on risk, you know, from transportation to safety to environmental hazards and those kinds of things.
We were the lowest risk approach because we're the only ones that are, you know, adjacent to the site. The other, you know, solutions would have to require transportation of untreated radioactive liquid, you know, to at least 600 miles EnergySolutions and farther to WCS. Obviously, the Perma-Fix approach, having a facility permitted right next door, is the preferred solution. It did include what was defined in the evaluation for NEPA in the WEIR document. That's why it's in there.
How would they transport that waste to the Perma-Fix Northwest facility?
It'll be in totes, and on the back of a large flatbed, most likely, and they'll bring over several totes, you know, a day when they're at full capacity.
Yeah. Seems like that would be rather dangerous to go all the way to Texas.
To go with that. Yeah. Yeah, exactly.
Okay, I guess the final thing for me, it would be on the secondary waste that you had mentioned earlier. It's really impressive to hear that revenue number. It's about twice my estimate, so also then twice the earnings per share that Howard had talked about. I guess just to make sure I understand and everyone else understands, I guess this is because of the incremental margins that you would have, given your fixed cost structure. Is that accurate? You'd have such higher margins because it's the incremental, it's not just, you know, what your current margins are?
Yeah. I think Howard's back of the envelope number, and I think his back of the envelope number is reasonable given, you know, our incremental margins. Then as Mark mentioned, there would be some additional fixed costs against that number. I think, you know, just again, back of the envelope, it's pretty reasonable given those volumes.
Well, thank you guys. You've done a great job navigating through COVID, it seems. Glad to hear that business is starting to turn the corner there and gonna be profitable and then obviously potentially lucrative stuff here at Hanford. Congratulations, guys.
Thank you.
Thanks, Aaron. We appreciate it.
Thank you. Your next question is coming from Anthony Harpel. Your line is live.
Hi, guys. Good morning. Thanks for holding the call. I have a number of questions, many of which are clarification related, just given there's so many moving parts. Maybe to start out with, for the TBI program, can you please clarify what price per gallon you would realistically expect to get paid?
Well, we don't wanna get too deep, Anthony, well, first of all, good morning, into costing of this thing. Generally, our established rates that we have in our MSAs are in the low $40 a gallon range for the actual treatment. That's the actual grouting. If a container of waste shows up on our dock, in other words, we're not paying for transportation, and we just have to grout it's $40-$45. Again, that can change based on the rate of nuclides and the different types of waste received, but that's generally a good number. In TBI space, if DOE subcontracts to us to deliver those totes I mentioned, of waste to our dock, they would likely subcontract us to grout and dispose of the waste.
If that's the case, and we have to pay for transportation and disposal at an offsite landfill, that price would be closer to $100 a gallon. We typically use $100 a gallon for the TBI as an alternative to include treatment, and disposal, at a, you know, at a Texas landfill at the WCS. That's where those numbers come from.
Do those same rates apply to treating the supplemental low activity waste from Hanford's tanks outside of the TBI program? I assume they're the same.
No, they don't. It's a good question, Ant. They are different. The reason they're different is important to us and important to the exclusivity of our program, and that is because of the agreements with the state, this waste, the secondary waste coming off of vitrification, which is what is defined as with the state as the preferred treatment alternative. What that means is, after the secondary waste comes off of DFLAW, we can put that waste in the local Hanford landfill. It won't go down the highway to Texas and EnergySolutions in most cases. There may be some exceptions. It will likely, mostly or largely go back onto the Hanford site into their gigantic, beautiful new landfill that's designed just for this type of waste.
It won't go very far away.
Well, to be clear, I'm referring to the primary waste, the supplemental low activity waste you're doing in TBI. I'm saying once the TBI program is behind us, and if this moves into the operational stage of treating the primary supplemental low activity waste, or would the rates that you would be getting paid be the same rates per gallon that you would be getting paid in the TBI program for that primary waste?
I'm a little confused. There is two different waste streams. There is one, the secondary waste coming off DFLAW, that is the one that goes back on site. TBI, which is, as you said, supplemental, that is the TBI. That, that is all, supplemental, and that would be the $100.
Okay. Can you clarify whether the DOE has officially made a decision to grout secondary wastes that are generated by vitrification of the tank's low activity waste, or whether this remains a proposal rather than an official decision?
The ROD amendment is quite a formal document. It defines DOE's decision on how to disposition the waste coming off of DFLAW. You know, it goes through a lot of pain and suffering through the DOE to get those ROD amendments approved, and supplemental analysis and that type of thing. It's a pretty formal decision in my mind. You know, it will... Yeah. To answer your question, yeah, in my from my perspective is a ROD amendment's very formal, and it's their intent to send the secondary waste from DFLAW for commercial treatment, offsite treatment.
Okay. Can you please clarify whether the DOE has awarded the tank offsite secondary waste treatment business to you all, to Waste Control Specialists, or to neither of you yet?
They have not made any awards yet, and we would not expect them to do that until the plant gets operating or very close to operating in the hot capacity. What they'll do on this, Anthony, most likely, and it's some speculation here, is there's each of the entities we've mentioned have contracts with the tank operating contractor, which at this point in time is WRPS. WRPS is there, notwithstanding who wins the ITDC. Whoever wins the ITDC obviously will get this contract. We have a MSA with them with established rates that will likely be renegotiated along the way. When the time comes for them to generate this waste, from DFLAW, they'll put out a task order. It may be competitive, it may not be, I don't know.
They'll put out a task order. In the case of this one, since there's only one company named in the ROD, it would likely just be a task order. We'll put in a price, they'll negotiate with us, we'll go. We have a contract in place. They'll put task orders in place as waste is generated, that's the contractual approach. That has not occurred yet, like I said, won't likely occur until DFLAW is operating.
That is a late 2024 event?
Correct.
Okay. If you all were to treat the secondary wastes that are generated by vitrification of the Hanford tanks low activity waste. I may have completely misunderstood your comments, were you implying based on the revenue numbers you had mentioned earlier, that you would realistically expect to get paid around $7,800 a cubic meter? Am I getting that math right or did I misunderstand?
Yeah. I don't even have a calculator in front of me here, Anthony, generally for 8,300 cubic meters, we're estimating roughly $70 million annually in revenue.
Okay. Regarding the ITDC. Are you saying, Mark, that the scope of it as it relates to Perma-Fix only includes services, not treatment?
I really can't talk about the procurement at all, because it's such a sensitive situation at this point in time. The RFP is public information and includes managing the facilities and waste management, which would include disposition of the tank waste to close tanks. It would be a component of scope within that overall contract. That's about all I can say about the procurement.
If I'm hearing you right, then we're talking about a $45 billion contract over 10 years, and it is a possibility that Perma-Fix could generate services business from that contract as well as treatment business from that contract. Possible. Is that a fair statement?
Yes.
Okay.
Well, it's possible.
It's possible for both services and treatment.
Correct.
Okay. Last question. Can you please give us an update, Mark, on the status of your renewing your Northwest Facilities Dangerous Waste Regulations permit?
Yeah. That permit has been in the renewal process for 12 years. We continue to work with the state and provide updates to the permit. Right now, Anthony, I think we're still another year off before we're going to see anything finalized. It doesn't keep us from operating what we're, you know, we're doing what we're doing. What it does keep us from doing until we get the final one renewed is new technologies like the GML system that we've got in place. We were able to run that through a treatability study for a year or so. Until we get the formal renewal, we can't do something new like that.
It is impacting us from that sense. The state is going through the process as they've have the last 12 years. We're hoping to have it completed in about a year, if I remember correctly.
It doesn't preclude you from, treating the waste that we've been discussing through any of these other initiatives?
No. No. Which is demonstrated by the TBI stuff that we've already done. No. We do grouting all the time now, you know, similar processes. We would not expect that permit renewal issue or delay to have any impact on everything we're talking about here.
Okay. Thank you. Appreciate it.
All right. Thank you.
Thank you. Your next question is coming from Ross Taylor, from ARS Investment Partners. Your line is live.
Thank you. We'll shift off of Hanford for a bit and like to talk to you about a couple of things. One, what you're looking at with things such as uranium mines, and how long do you think that ends up working out? What kind of opportunities that have? Generally, what other kinds of opportunities are you seeing of that sort around the country that are starting to be freed up? I'd like to ask you to talk about what you see happening with regard to the Navy. The Navy has a lot of ships. More nuclear capable ships look like they're gonna be coming offline again this year. They're building up what looks like a fairly interesting fleet of mothballed nuclear vessels that they need to deactivate. Where do we stand with the ability to kind of push those major contracts forward?
Sure, Ross. The EPA program for abandoned uranium mines, it's been a while since I've looked at that information, but I want to say there's like 180 abandoned uranium mines that are within this program. It was, it received a good slug of funding about 5 years ago when these IDIQ bids came out. We were awarded a contract with our prime, who's a Native American firm, and local to the area, in the Navajo region there, in Northeast Arizona. This is the first one.
They've there's a contractor they've hired Ross, I believe it's Tetra Tech, that their job, and it's been highly funded and most of the funding has been, I think, at the end, they actually spent all their funding, where they're going around doing the characterization and surveying and de-developing the scope for each one of those mines. As I mentioned before, I believe they have 12 or 18 done. Next step after Tetra Tech does that is they turn over the information to the EPA. EPA puts together a procurement between these three bidders, these three awardees, and they go. We won the first one of those. They're very remote locations, some more remote than others.
They will be off and running, hopefully start making awards, subsequent to the first one, through the summer. Some are very large, some are smaller. This is a smaller one. We're hopeful that once we get going, our systems will be in place, and they can keep operating, and once they're in the field, 'cause mobilization is so expensive on these types of things. It's very difficult to tell you know, what type of funding this year looks like, 'cause they've had funding for years and years, and it's all been stifled because of procurement.
I don't know if procurement's gonna get things rolling this year or not, or if it's gonna be next year. The projects remain, the objectives remain, there's a lot of politics behind them. They seem to be off and running. Like I said, our kickoff meeting for the first one is with EPA is actually next week. We'll have more information on that by the next earnings call. As far as the Navy goes, the Navy is, boy, it really got stifled, too.
you know, we reported a couple years ago on this call that the GAO and they put a report together, they're gonna decommission 48 ships, I think 12 of those are gonna be nuclear, and they're all gonna be done in four years. Nothing's happened in about 18 months to two years until about the first week in second week in March. They had an industry day, the Navy did, excuse me, in the Navy headquarters in D.C., and went over the plans for the Enterprise to be the next vessel they're going to decommission. We're expecting an RFP, I believe it's this summer, and that'll be the next one coming. Teams are forming on that.
We're working with company, several companies to define the right team, based on the fact that we've got some good project calls from the ship we're doing now, and it's going very well. We're hopeful to get on the winning team for that. I would anticipate it to be quite a while for that to award, probably a year or so, I think they'll enable you off and running with that business model. I know the Nimitz aircraft carrier's also close behind the Enterprise, there's a few others that names escape me at the moment, that will be on the list as well.
We're hoping with this Enterprise initiative that it'll be kind of beginning of this market getting rolling, and hopefully we can get on the right team.
Right now these vessels are just sitting idle?
It's like for the Enterprise, my understanding is the Enterprise is sitting at HII, Huntington Ingalls, in Norfolk. They're maintaining it. You know, it has eight reactors on it, so it's a big job and a complex one to make it go away. Yes, it's sitting in the, in the harbor there or shipyard there in Norfolk.
Nothing can go wrong with that. You talk about the competitive environment. It looks like in a lot of places you're operating, you have a very limited number of competitors. It would seem to me that one of the risks the government runs into in here is that it needs to make sure that it continues to have competitive options, so therefore, one would expect to see some spreading of business, my words, not yours. How do you see that environment and is that a not incorrect read that given the limited number of people who can do what you do, that basically over time, everyone needs to win some?
I sort of like to think that, Ross. That not only government, but even the primes have that same perspective. You know, if one company gets all the work, you want a competitive market. DOE certainly understands that. I think, you know, they consider that. I don't know how they consider it in these big proposal initiatives. But I do believe that's the case and that everyone is sensitive to the comment you just made and understands the importance of spreading it around as well. Yes, I think that's an objective.
In areas where perhaps the other side, the other group won, there might be some unbiased or some potential tilt to the idea of keeping your consortium and your team in the game, otherwise you risk losing the capability entirely.
I just don't understand how that's gonna all play out with this award 'cause it is so large. We certainly, you know, have a long-term mission in the Richland area up there, and a very unique capability that other folks don't have. I would expect, no matter what happens, I would expect to be a player on the waste treatment side of the house for the long term with that contractor.
Yeah. Just a quick comment on, obviously, you've mentioned some of the rail transport there. Obviously, everyone knows about what went on in Ohio, I thought it was interesting. There's a lawsuit by a Native American nation against the Burlington Northern and Santa Fe for an oil train derailment a number of years ago, I think it was back in 2015, that just after that trial started, Burlington Northern and Santa Fe derailed another train on that nation's property, or land. I thought, it does highlight the fact that any time you put anything on a train and haul it someplace, bad things can happen.
That's right.
which obviously increases the risk and the cost of the project. Otherwise, I think it sounds like from what you're saying, that a lot of this. I noticed the tenses that you're using. A lot of the tenses you're using are not what you might call hopeful tenses, but expected tenses, that you see this happening and you see this as really like the game, you know, it's not the game might change, it's the game has changed and it is changing, and that those pieces are already moving, the rocks are already sliding. Is that a correct read?
Well, you know, Ross, we have to be careful to, you know, as a public company, to only speculate on these things. There is risk, obviously, we all know that going into this. What Perma-Fix has tried to do over the last seven years, particularly, is to get as many big irons in the fire as we possibly can with the hope that a couple of them will win. The one thing I am very confident about is the ROD that came out that everyone has commented on is could be viewed to a large degree as a commitment by DOE to ship us that waste.
There is risk that plant, you know, has to get up and running, and operate, but that's a pretty big commitment they made to commercialize through local capabilities, that secondary waste from DFLAW. We're more than optimistic than usual. Obviously, ITDC and OSMS are procurements. They can go either way. We could be either really lucky or not lucky, but we feel like we've got enough other things going on that we're continuing to see the growth we had before COVID, irrespective of those wins. Hopefully, those wins really transform us, if we can get a couple.
Right. Yeah, it sounds like they should be transformational. I would think you probably have reason to be more optimistic than you just sounded, but thank you very much.
Thank you.
Thank you. Your next question is coming from Steven Fine from Fine LLC. Your line is live.
Good afternoon. How are you guys?
Hello, Steven. Good afternoon.
I have a scripted comment, but I got two questions prior to it. Number one, you mentioned there were labor problems. Are they being rectified or rectified?
What it comes down to, Steve, particularly at Hanford, but also in Oak Ridge, DOE has seen, as every manufacturing entity really has seen, a big gap in labor, and particularly with the union folks. They've been hiring hundreds and in some cases, thousands of people. We've lost a number of folks at both Hanford facility and Oak Ridge facility to the large DOE facilities. You know, they have a little better benefits. Our pay is pretty similar, but there's some advantages and disadvantages between each of the firms. With the big pull from those hiring initiatives, we did lose a lot of folks, particularly a lot of folks at Hanford. That all happened in Q4.
Early Q4 and got worse in these first two weeks of December. It really impacted productivity at Hanford between the holidays. Since then, we hired in December very quickly. We were able to find folks. They did require a lot of training, but they've been there since. Our general managers were all here in Oak Ridge this week for an off-site. They all reported that labor has not been an issue through the month of March, particularly, and most of February, and that we've got the labor part behind us, labor issues behind us
Good. My next question before I read what I wrote. In the write-up, it says there was $1.2 million written off from the medical. Where does that all... You know, I understand what that was from, but how does that impact the financials? I mean, what is that? Is that $1.2 million less or, you know,
Yeah, Steve, that was all last year, 2021.
All right.
Net-net, it was zero because it was.
Okay.
within the entity. Our medical segment, it was basically writing off money we'd invested into the medical segment. Perma-Fix Environmental takes the loss, but medical gets a gain from the write-off. It, it's a wash in consolidation.
Okay, thanks. All right, I'm gonna read a statement. You know, I've lived and slept with your company, and, you know, hopefully, this will be informational. I just wanted to applaud the progress and actions of Perma-Fix. In that vein, I would like to express my thought on today's unique potential of Perma-Fix. In 2006, I was introduced to Perma-Fix and asked to do due diligence on the company. Among my three degrees, I am an engineer and an MBA. I was a hazardous chemical manufacturer for many years. I was a government contractor, but also a business and science consultant who, throughout my career, assimilated various technical businesses and opportunities and either commercialized or analyzed and reported.
Immediately surveying Perma-Fix, I realized their four plants at the time in 2016 were essentially non-duplicable because of the plant, people, radiation permits, and unique ability to handle low mixed radiation waste. The infrastructure and its capabilities cannot be understated in its uniqueness and value. Since 2016, I have watched how Perma-Fix has moved to diversify in a multitude of areas beyond those at Hanford. Clearly, Perma-Fix is capable of being a $150 million+ company without Hanford. With treatment and service segments, this lends to a wide array of possibilities. Immediately when I started studying the Hanford reservation, and particularly the vitrification plant being built, I frankly was aghast. Over 30 years, not 1 gal had been treated from the 66 million gal of mixed nuclear waste sitting in the 170 tanks.
In 2022, there was $1.5 billion spent on maintaining the waste in the tank and building the DFLAW plant to treat low-level waste. I immediately understood that 90% of the waste in the tank was low radioactive waste and more suitable for treatment by immobilizing and then solidifying with concrete. This has been done in Savannah for decades. Since 1992, Perma-Fix has treated millions of gallons of mixed radioactive waste by immobilizing and then solidifying with an appropriate concrete. I thus immediately questioned the Test Bed Initiative and its purpose. It just seemed there could be a quicker path for treatment by Perma-Fix. The waste in the tanks becomes even larger, as it must be liquefied before treatment. Arguably there can be 2x to 4x more waste to treat.
Various sources as GAO, NRC, NAS have stated it will take, in any treatment way, 60-70 years to treat the tank waste. A study completed by GAO last summer states immobilizing and solidifying the concrete will save tens of billions of dollars. The National Academy of Sciences recently states that immobilizing and then solidifying with concrete at an off-site facility and burying off-site would push treatment forward 10 years, thereby taking pressure from leaky tanks, space, and facilitating movement towards building a plant to treat the high-level waste. It will also ensure preservation of groundwater at Hanford. For over a year, this has existed in the tank farm, a system called the Tank- Side Cesium Removal system, the TSCR. The TSCR separates high and low waste. After three phases of filtering the product, remaining is a watery, mixed, hazardous, and low radiation product.
Radiation is no more than one would experience in a medical test that is ready for treatment. The TSCR can do 7,200 gal per day, thus there is over 300 gal sitting in a feed tank today. The nature of this product has been generally not vitrified. Last summer, I was exposed to non-cost studies of vitrification versus grouting. Grouting is the name used for the concrete process, but I underscore a misnomer because it is confounded with just covering waste with concrete and not immobilizing as Perma-Fix would do. These studies were completed in the summer of 2021 by Laura Cree, who works for Washington River Protection Solutions, the Hanford tank plant contractor in charge of maintaining the tank waste. Ms. Cree chose to use a million-gallon samples for each mode of treatment.
For grouting, all waste was treated and there was no secondary waste. No heat is used. There is no diesel, copious amounts of water or hazardous chemical. The process is environmentally clean. The data Ms. Cree used was supplied by Savannah, which as stated, they had been grouting for years. Grouting is one-tenth the cost of vitrifying. Savannah has one reactor, so it has been argued that their hazardous waste is more homogeneous, while at Hanford, there were a number of reactors and thus a multitude of hazardous waste to treat. Perma-Fix has stated that it can or has treated the hazardous waste listed in the 170 tanks. Dr. Jim Conco who has a PhD in geochemistry and is well known nationally states there should be no issue in treating the multitude of hazardous waste.
For the vitrification, 1 million gal model, about 340,000 gal, so that's only one-third, was vitrified, and the other two-thirds was secondary waste that has to be treated in ways other than vitrification. Data was supplied relevant from Hanford contractors building the vitrification plant. With vitrification, it requires 2,000 degrees Fahrenheit, 3 million gal of diesel fuel, which throws off over 20,000 metric tons of CO2, 2 million gal of water, which mainly is contaminated and becomes secondary waste, 151 truckloads of hazardous chemicals. The amount of energy used would energize 15,000 homes. There was a statement that vitrification could cause 36 high consequent hazards. The model used assumes a 70% efficiency, but vitrification plants typically have efficiencies around 40%, and this should take longer, be more expensive, and possibly worsen the vitrification outputs.
Perma-Fix can treat now 300,000 gal per year, which is equivalent to 1 million gal of inputted waste into the vitrification plant, as maybe one-third will be vitrified. Perma-Fix has related they can scale up to 3 million treated gallons per year. This is equivalent to 9 million gal of waste inputted into the vitrification plant. Note, the vitrification plant would create 6 million gal of secondary waste. Governor Inslee of Washington State was interviewed in August 22 by The New York Times. The governor touted how he was early in calling for climate change. The legislature of Washington State has advocated concern regarding CO2 and environmental responsibility. Recently, our government has stated that any government contractor doing over $7 million a year must be responsible in its environmental profile.
Relative to the above concerns for environmental strain, one can question how the political ecosystem of Washington State promotes the vitrification plants. The political ecosystem of Hanford is vitrified in its focus that the tank waste needs to be vitrified. There seems to be no issue that secondary waste would be treated by Perma-Fix, which in my mind is oxymoronic to opposition to Perma-Fix immobilizing and solidifying waste with concrete directly. As a problem solver, I do not understand why Perma-Fix cannot start treating the waste in the TSCR now as the vitrification continues to be built. There would be two systems treating waste and help get the waste treated faster, provide backup. The Hanford reservation is in an earthquake zone, and we know climate change is real.
There needs to be an urgency because with a black swan event, this will negate no treatment of the waste. In January 2023, DOE published a new ROD, Record of Decision, how the waste would be treated with vitrification. This supplanted the ROD last published in 2013. It was quite a complement to Perma-Fix unique ability that DOE proposed 2.2 million gal of secondary waste would be treated by Perma-Fix Northwest, and there is product that would go to a Midwestern plant of Perma-Fix, too. The ROD is framed so the treated secondary waste would come back to Hanford and buried there. This is an important nuance implying the nearness of Perma-Fix plants. Someone asked the question, by the way, in the ROD, it distinctly says nothing will be shipped other than by truck.
Two, implying the treatment prowess of Perma-Fix. The ROD is also very interesting with the section on acetonitrile. This is a potential hazard created in the vitrification plant, which under certain heated conditions can create cyanide gas. All the acetonitrile would come direct to Perma-Fix.
Hey, Stephen, this is Mark. I think we're gonna probably have to wrap up, Mark. Can you conclude on that, Stephen, before we move forward?
Excuse me?
We're gonna need to move on, I'm afraid. Are you close to the end or do you have a conclusion that you can wrap up?
I have two more paragraphs.
Okay.
Finally, there has been a tank maintenance contract for the tank farm sitting out there for award. It is for 10 years and $45 billion. Perma-Fix is part of the two consortiums bidding. If Perma-Fix consortium wins, Perma-Fix would have people on the ground at the tank farm, irrespective of any treatment at their Northwest plant. The contract encompasses maintaining the tanks waste and running the vitrification plant. In any case, Perma-Fix will treat waste. That is a given. Of course, it will be a significant impact to the financials of Perma-Fix. Over the last year, I have commented to DOE, Ecology, and EPA of Washington State. Had comments by court order included in the files of the consent decree. My comments are publicly included in the National Academy study on low-level waste at Hanford.
In this vein, I urge you to speak to your congressional representatives in order to start treating waste at the Hanford tank farm. There is no reason that Perma-Fix should not be treating waste right now. I'm done.
All right. Thanks. Yeah, we appreciate your passion on this topic, Stephen, and your support. I do have to say that the statements that were made by Stephen were Stephen's alone and don't necessarily reflect all the views and opinions of PESI as a company. We appreciate your support, Stephen. Okay.
Thank you.
I'd like to thank everyone for participating in the fourth quarter and year-end conference call. We remain extremely confident in the outlook for the business. We appreciate the continued support of our shareholders, and we look forward to providing further updates as developments unfold this quarter. Thank you very much.
Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.