Perma-Fix Environmental Services, Inc.

Please stand by. Your program is about to begin. If you need audio assistance during today's program, please press star zero. Good day, everyone, and welcome to the Permafix first quarter 2021 conference call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. I will be standing by should you need any assistance. Please note that this call may be recorded. It is now my pleasure to turn today's program over to David Wildman, Investor Relations. Please go ahead.

David Wildman Thank you, Jasmine. Good morning, everyone, and welcome to Permafix Environmental Services first quarter 2021 conference call. On the call with us this morning are Mark Duff, President and CEO, Dr. Lou Senefani, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing first quarter 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. I'd also like to remind everyone that certain statements contained within the 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 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-GAP measures. Permafix 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. Now I'd like to turn the call over to Mark Duff. Please go ahead, Mark.

All right. Thanks, David, and good morning. As anticipated, revenues in the first quarter were impacted by the ongoing effects of COVID-19, but I'd like to reiterate that we remain extremely encouraged by the long-term prospects for the company. Although certain segments of the economy have started to see a rebound as the pandemic has begun to subside, we are still feeling the impact, especially within our government business. Specifically, within our treatment segment, shipments have been temporarily delayed as the government has been focused on getting people back to work. But it's important to note this business has not gone away. To the contrary, we expect to benefit from the government's fiscal 2020 carryover funds in addition to 2021 allocations that have been pushed out and should help fund an acceleration of projects within the treatment segment as well as the services segment. Within the services segment, we achieved modest growth in revenue despite delays throughout the industry in evaluating bids and proposals and awards of procurements. also due to the pandemic. Nevertheless, we've begun to see return to normalization overall. Clearly, we're disappointed in the impacts these delays have had on our business, but we've continued to aggressively identify and pursue opportunities that align with our core competencies, specifically in waste management and radiological remediation. In fact, as I've discussed in the past, our bidding pipeline is more robust than ever. We have been developing four to five simultaneous proposals at any given time throughout the first and second quarter by leveraging the technical and management talent that have joined our firm over the past two years. Our teams have been working around the clock on these bids and opportunities. In the past, we haven't had the resources to concurrently bid on this number in size of procurements considering the tremendous upfront resource required to evaluate and submit bids of this scale. As a result, we have an unprecedented number of outstanding bids that have been submitted and are awaiting awards. These bids are collectively valued in the hundreds of millions of dollars. As I mentioned our last call, we are currently forecasting about 100 million new procurements and task order values over the next six months alone. based on existing IDIQs that we currently hold and have recently won and anticipated projects that we've been informed of on the horizon. We have also performed exceptionally well on our current projects, which gives us the client references and track record to not only win many of these new awards, but also begin bidding on much larger projects. As an example, several large DOE procurements, including the Oak Ridge closure and the integrated tank disposition contract, both within DOE, have been recently published. which include requirements for comprehensive waste treatment solutions, as well as end-state contracting model, which support innovations and technology applications for success of the contracts. Importantly, these large bids with values in the billions include aggressive small business contracting requirements, which plays well into our strength as a small business, and most of these contracts go for over 10 years in total duration, including the option of the years. As most of our investors are aware, Permafix continues to support the Department of Energy in development of a supplemental technology in support of safe and compliant treatment of low-level waste from the 56 million gallons of tank waste located at the Hanford Reservation. Low-level waste represents 90% of the inventory of the radioactive materials in those tanks at Hanford. The DOE demonstration project is referred to as the Test Bed Initiative, or TBI, and Although that name has been changed a number of times in recent months, we still refer to it as the TBI program. This program has slowed down over the past few years with the change in administrations and with shifting priorities within the department, and more importantly, most recently with the COVID-19 pandemic. Congress is still interested in this demonstration project and the associated initiative, and the program remains funded in the FY 2020 federal budget for $10 million to implement phase two of the project. We completed phase one of the project with the treatment and disposal of three gallons of tank waste back in 2017. Phase two will include extraction, shipment, transportation of 2,000 gallons of tank waste to our PERMFIX Northwest facility located in Richland, Washington, about 15 miles from the tanks with subsequent processing and disposal in a permitted landfill in Texas. In regards to status of the program, Dewey continues to develop an R&D&D permit. An R&D&D permit is a research development and demonstration permit. for the review of approval by the State of Washington Department of Ecology to enable the implementation of Phase 2. As we've stated in the past, we're assuming we're successful in this project. The project can be transformative overall to Permafix significantly. We remain optimistic that the RD&D approval process will be completed in Q3. to receive shipment of the 2,000 gallons around the first of the year in 2022. DOE and Congress have been supportive of the TBI program as a supplemental option to other alternatives that are also being considered. Perfects will continue to work with DOE and the regulators and our associated congressional delegations to ensure common understanding that this technology the value of this technology brings to the DOE and the value of the technology overall in our supporting facilities and what they can provide to the department. We remain optimistic that the new Biden administration will recognize this value as well and see how it supports the overall DOE cleanup mission. Recent events in the news have only accelerated the pressure to begin treating these waste streams with a renewed sense of urgency. We believe our technology provides a very safe and cost-effective solution for near-term processing of the Hanford tank waste. We truly believe and anticipate that as we come out of the COVID pandemic, we're well positioned to aggressively grow both sides of our business, and we're already starting to see things pick up. As we look at our pipeline in June and beyond, we expect to be fully back on track by Q3 and begin to resume strong organic growth moving forward again, as we have the past few years. In the meantime, we've invested heavily in our capabilities and our facilities. We've We have a highly scalable infrastructure. We have a first-class team in place to take us to the next level in regards to our staff and resources. Perfix continues to maintain our four treatment facilities, including our newest venture, the Environmental Waste Operations Center, or as we term it, the EWOC, located here in Oak Ridge, Tennessee. We've just begun to generate revenue there and offer an expanded array of services to our clients for dismantlement of large equipment. as well as a bulk processing of radiological materials. With our state-of-the-art treatment plants, along with our bench of key technical staff, we believe we have the foundation for growth that can be realized in the next few quarters. In terms of our facilities, it's worth emphasizing the significant intrinsic value of these plants. It would be nearly impossible for any company to replicate our facilities and technologies, let alone get them permitted. Even if they could, it would likely cost in excess of $50 million for each one of those plants and take years, if not decades, to get permitted. And we now have four of these facilities strategically located around the country, each with their own technologies and unique capabilities to support our overall client base. I truly believe that the future is brighter than ever, and we look forward to driving significant value for our shareholders. And one final note, I'd like to formally welcome Kerry Dugan to our board of directors. Kerry is one of the nation's premier environmental policy experts, having held senior roles in the government, as well as in private and academic and nonprofit sectors. Just to highlight a few of carries many accomplishments. She's previously served as Deputy Director for Policy to then Vice President Biden in the Obama-Biden White House. She's held senior roles in the Department of Energy as well. She also served as a Biden campaign appointee to the Biden-Sanders Climate Change Unity Task. Task Force. We'll be providing a more detailed announcement with her full bio that I encourage you to review in the press release later today. I know Carrie shares our enthusiasm for the work we're doing here at Permafix, and we're really excited and looking forward to working closely with her and leveraging her unique relationships at all levels of government. to advance our mission in addressing some of the nation's most pressing environmental challenges, particularly associated with radioactive waste. On that note, I'll now turn the call over to Ben, who will discuss the financial results in more detail. Ben.