Perma-Fix Environmental Services, Inc.

Good day, ladies and gentlemen, and welcome to the Permafix second quarter 2021 conference call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require any assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.

Thank you, Rashaun, and good morning, everyone, and welcome to Permafix Environmental Services' second 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 second quarter 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1021. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Security 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. 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. I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.

All right. Thanks, David, and good morning, everyone. During the first half of 2021, we continue to experience the impact of COVID-19 pandemic as the federal government has been much slower than the commercial sector to resume normal operations. This was not unique to us, but has been experienced across the industry by most of our peers as well. Nevertheless, we're able to report a net income of $3 million for the quarter. We have $7 million in cash on the balance sheet and have lowered our bank debt to under $1.5 million. Importantly, we've begun to see activity pick up heading into the third quarter and expect a solid second half of the year, barring any further slowdowns related to the COVID-19 new strains. Not only did we see things pick up this year, but we also believe we're very well positioned for 2022, as there is a tremendous pent-up demand in both our treatment and our services segments. Turning first to our services segments, Our bidding pipeline is more robust than ever. As I mentioned last quarter, our teams have been working around the clock, and we've been developing four or five simultaneous proposals at any given time. This is a direct reflection of the improvements we've made internally and specifically within our bidding organization. As a result, we're now bidding on a wide array of contracts collectively valued in the hundreds of millions of dollars. The fact is that we're not losing bids. The government procurement process has been delayed, and these contracts will eventually get awarded. Just last month, we were awarded a multimillion-dollar service contract for the Tritium Systems Demolition Disposal Project, which is expected to be completed over the next 18 months. We believe this contract is a good illustration of where things are heading and reflects our competitive edge. This specific procurement included significant competition with several of our toughest competitors as well as larger firms all bidding against us. Although this particular contract is smaller than some of the other contracts we're bidding on, it does show that the market is starting to open, and we expect more contracts to be announced and awarded in the coming weeks and months. It's also worth noting that some of the contracts we're bidding on, if we are successful, could be transformative to the company. Importantly, these larger site operations and cleanup procurements within the Department of Energy are multibillion-dollar awards and include substantial small business subcontracting requirements as a percentage of the revenue. This plays into our strengths as Permafix plans to remain a small business as defined by the government as under 750 employees. for the foreseeable future. While we're working hard to secure teaming relationships on the proposal efforts, even if we're not successful on initial awards, there's still significant future opportunities for subcontracts with these primes on these projects within both of our segments. Turning to our treatment segment, we're beginning to realize increases in waste treatment activity both in bidding opportunities, receipts, and plant production as our services segment Shipments have been delayed through most of Q2, but it's important to reiterate this business has not gone away. In fact, the backlog of waste that must be treated continues to grow. Due to the diversification efforts of our sales team, we've been able to penetrate several new commercial markets, and coupled with our typical government acceleration at the end of the fiscal year, which is Q3, we anticipate waste receipts rates closer to normal heading into September and into Q4. We also continue to expand our waste treatment offering. We recently completed design and began fabrication and construction of our new Thermafix Gen 3 system, a third generation vacuum thermal desorption system. The Thermafix Gen 3 unit offers a treatment solution for problematic waste streams while providing increased efficiency and productivity as well. With our initial sales launch, Just a couple months ago in June of 21, and even before the unit has commenced operations, we've already secured an existing on-site waste treatment backlog and inventory and a large sales pipeline, which underscores the demand for this capability in both the commercial and the government sectors. We're very excited about the system and anticipate steady receipts up through June. Start up in the fourth quarter and well into the 2022 timeframe. Turning to the Testbed Initiative, which we refer to as TBI, it's also referred to as the Low-Level Waste Offsite Disposal Project. We continue to make progress and have received strong support from the Department of Energy in terms of providing a supplemental pathway for treatment of level waste from the 36 million gallons of tank waste located at the Hanford Reservation. DOE recently notified the Washington State Department of Ecology that they are preparing an environmental assessment on the next phase of the testbed initiative. The environmental assessment, or EA, process is one of the final steps required before we can commence phase two of the project, which will include extraction, shipment, and transportation of 2,000 gallons of tank waste to our Permafix Northwest facility located in Richland, Washington. VOA officials have recently stated that shipment of this waste to our facility should occur prior to next summer. As recently reported in the local Hanford area newspaper, the Tri-City Herald, use of grouting, which is the basis of our process to treat the Hanford tank waste, could save the taxpayer billions of dollars and speed the emptying of the tank waste from the leak-prone underground storage tanks. As we've stated in the past, assuming we're successful, this project can be quite transformative to our company and will supplement the vitrification unit, which is currently under construction and testing at the DOE Hanford site. So to wrap up, while we're disappointed in our overall Q2 performance, we believe Permafix is well-positioned for growth. I'm especially proud of our business development efforts. Our team has initiated and completed, which highlights our ability to adapt to the changing market. During this period, we've also invested in our capabilities and our facilities and have built a highly scalable infrastructure with a first-class team of folks to take us to the next level. Now, with the return of normalization following the pandemic, we truly believe we're well positioned to aggressively grow both sides of the business, and we're starting to see things pick up. As we look at our pipeline for the balance of this year and beyond, we expect to resume solid organic growth in the near term. I truly believe that the future is brighter than ever for Permafix, and we look forward to driving significant value for our shareholders. On that, I'll now turn it over to Ben, who will discuss the financial results in more detail. Ben?