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Operator
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.
David Waldman
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.
Rashaun
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?
David
Thank you, Mark. I'll start with revenue. And as mentioned earlier, the COVID pandemic really impacted our revenue in both segments as government sites haven't shipped the waste at their historic volumes and have been very slow to award or fund projects in the service segment. So as such, our total revenue for continuing operations for the second quarter was $16.1 million compared to last year's second quarter of $22 million, a decrease of $5.9 million or 26.8%. The decrease in the revenue is primarily due to the drop in the services segments and that totaled about $5.8 million, while our treatment segment was only marginally down from prior year, about $134,000. The drop in the revenue in services was due to the completion of a large project whose revenue we've not been able to replace by another project or projects of equal value. For the year to date, June 30th, our revenue is down $7.6 million, or 16.2%. And this drop in revenue comes from both segments as the service segment has been impacted again by the completion of certain projects and is down approximately 5.4 million, while the treatment segment has been impacted by the drop in volume of waste and is down 2.2 million from last year. From a gross profit standpoint, the quarter was $966,000. compared to $3.3 million in second quarter of 2020. And the drop in the gross profit was approximately $2.3 million. Of $2.3 million was primarily from the services segment, where reduced project revenue impacted gross profit from both a volume and margin standpoint. Also, lower volume of waste mix had a minimal impact on the treatment segment, while the fixed costs at the plants were we were able to keep that fairly constant. For the six months ended June 30th, gross profit was $3.3 million compared to $7.9 million in prior year. This drop in gross profit was impacted by the lower volume in both segments as well as reduced margins in the service segment projects. Our G&A costs for the quarter were $3 million compared to $2.7 million in the second quarter last year. This increase of $297,000 was primarily related to increased salaries and consulting expenses that supported the increased bid and proposal activity. For the six months ended June 30th, G&A costs were $6.2 million compared to $5.6 million in the prior year. And again, the biggest impact on this variance was the higher bid and proposal expense from labor costs and outside consultants. Our net income attributed over common shareholders for the quarter was 3 million compared to last year's net income of 204,000. The main driver of this improvement was a gain on the extinguishment of debt related to the company's PPP loan, which totaled 5.4 million and was forgiven in June of 2021. Our basic income per share for the quarter was 25 cents compared to income per share of $0.02 in the prior year. Our year-to-date basic income per share was $0.16 compared to $0.12 in 2020. Our adjusted EBITDA from continuing operations for the quarter as defined in this morning's press release was a loss of $1.7 million compared to income of $847,000 last year, and this reflects the lower revenue in both segments impacted by the ongoing effects from the COVID pandemic. Turning to the balance sheet compared to year end 2020, our cash on the balance sheet was at 7.3 million compared to 7.9 million at the end of 2020. Our unbilled receivables were down 7.1 million, which reflects the reductions in revenue compared to Q4 in the service segment. Our current liabilities were down 8.8 million as a result of the timing of our payments, a reduction in the activity in the service segment and the forgiveness of the PPP loan. And our backlog at the end of June was $6.7 million, which is down from $7.6 million at year end and up slightly from $6.4 million in June of 2020. And our total debt for the quarter at quarter end was $1.3 million, which is primarily owed to PNC Bank, our credit facility. Finally, I'll talk about cash flow activity in 2021. Our cash provided by continuing operations was $803,000. Our cash used by discontinued operations is $315,000. Cash used for investing of continuing operations was $649,000, which is primarily cap spending. And our cash used for financing was $439,000, which represents our monthly payments on our term loan, totaling about $219,000 and another $220,000 for finance, lease, and debt issuance costs. With that, operator, I'll now turn the call over to questions.
Operator
OK, ladies and gentlemen, we have reached the question and answer portion of the call to ask a question. Please press star one on your telephone keypad at this time. And our first question comes from Howard Browse. Howard, please state your question.
Howard Browse
Mark Ben, first of all, I hope you and your families are well and protected from the COVID. Have anybody been? affected by it?
Rashaun
So far, so good, Howard. Thanks for asking. Yeah, we're good. We're good at the families, Howard.
Howard Browse
All right, good. Thank you. That's the most important thing. Let me first start with TBI, the filing. When do you expect that filing to the state?
Rashaun
Right now, they're working on the WEIR permit, and I don't know exactly when that's supposed to go in Howard, I know that they have scheduled a hearing for the EA based on draft comments, the comment period. That's supposed to happen in the next few months, and then they'll submit the permit to the state. And they're doing it in sequence as opposed to in parallel, which is something we're pushing them to try to consider doing both at the same time. But all that should happen in the next three or four months and support getting to a point of beginning to do this extraction in the spring.
Howard Browse
Given that permit, what are the possibilities or probabilities that once you start extracting the 2,000 gallons, the spigot stays open?
Rashaun
uh it's difficult to speculate how we're we're certainly keeping that option uh open and and we're able to support it staying open we can do up to 300 000 gallons a year now with our capability to end with our permit uh so we're certainly promoting that uh do we need to decide to do that you know there's still some question is whether they're going to use the tisker system which is much more elaborate pumping and extraction system or the originally designed, what we call pump on a stick, that was designed just for TBI, which is much slower. And if they use that TISCR system, it'll go very quickly and pull out about five times as fast. So that would certainly set this up for a more sustainable approach. I don't know if DOE has made those decisions internally yet, but certainly one could speculate that if you're treating the tank waste successfully, that they would continue to support that demonstration with greater volume, but it would be speculation to make that assumption.
Howard Browse
Okay, fair enough. Am I missing something, but is it fair to say that a good number of the mid-level executives in the DOE have not been appointed, and that's part of the problem of the lack of some of these large awards?
Rashaun
Yeah, it is a fair statement. Howard, I think, again, it's real difficult to understand what's holding some of these bids up. As we've mentioned the last several conference calls, we have a pretty sizable spreadsheet of bids that we've submitted with significant award values, and commitments for awards have been just continually delayed. One could speculate, and I would definitely believe, Howard, that your statement is true, is that because there is not a Assistant Secretary confirmed by the new administration that there is a tendency to wait for that to occur. And while they do have a good team of folks, you know, they're carrying over from the old administration that are managing things, you know, there's just a natural, I think, tendency to wait for the new person to arrive to make these big decisions. So I would speculate across the board, Howard, that The lack or delays of getting the assistant secretaries in place in many of these cases has an impact on the procurement process for sure.
Howard Browse
Would that be the same for the EPA with the Navajo bids?
Rashaun
You know, the Navajo, what you're speaking about is the abandoned uranium mine program. And that one is more of a mystery. I have to assume you're correct on that. I don't follow the EPA organizational chart as much as DOE, but I have to assume it's a similar situation. I know at one time it was funded. I don't know if that's changed. We all know it's a significant program that has a very significant future for us and for other participants involved. and we were initially informed that task orders would have been distributed months and months ago. So I don't know what's holding it up. We had a difficult time finding information or getting information back from it, but I have to assume you're correct that it's largely because of administration changes.
Howard Browse
Well, the settlement was $1.7 billion, the EPA with the Navajo, so the contract we're talking about is about $220 million of my memory serves me correctly. Does that sound about right?
Rashaun
That's basically the contract value for that IDIQ. That's correct.
Howard Browse
All right. What about, as an example, Moab, Lucky, Oak Ridge, the Navy bids? Is that all the similar vein that we're still awaiting?
Rashaun
That's correct, Howard. You know, there's also, though, even at lower levels, there's a lot of task orders, you know, in the $5 million to $10 million range that don't require that level of approval. And the procurement processes are just moving really slow across the country in all different organizations. We have task order bids, the DOE, the Corps of Engineers, the Navy, all waiting for announcement of award and mobilization. And it's really every level of procurement process. have been very lethargic in the decision announcement process. So, you know, it may not just be the administration issues. I think it's largely COVID-related where it's just a lot of people working from home and the rush to get back out in the field is not there yet because Our clients are not out in the field yet. So, you know, it's really both. The larger ones are certainly administration dependent, but the smaller ones, I think, are just slow processes in the procurement cycles.
Howard Browse
Mark, Ben, wish you the best. Stay safe and good luck. Thank you very much.
Rashaun
Appreciate your support, Howard. Appreciate it. Bye-bye.
Operator
Again, ladies and gentlemen, to ask a question, please press star one at this time. Again, that's star one to ask any questions. Up next, we have Ryan Hamilton. Ryan, please state your question.
Ryan Hamilton
Good morning, everyone, and thank you for taking my questions. Good morning, Ryan. Could you, you touched a little bit on your opening remarks, but could you walk us through the cadence of the quarter? And maybe start with March and kind of just walk us through how March, how like May looked compared to April and so on. Kind of just walk us through that if you don't mind.
Rashaun
Yeah, Ryan. March and April were, and we talked about this several quarters ago, and we had kind of a fiery discussion, I want to say, in Q3 and Q4 last year, that we expected Q2 to be a tough quarter for a number of reasons. Number one, we had targeted and defined an unusually large quantity of large procurements, like the Moab procurement and a number of others, that were going to require some investment and positioning, that we felt we had a real offering that was going to be very competitive. And we did get that, and we got a number of others. So as far as the cadence on the services segment, we saw the project in Seattle, which was very good to us for two years, ramp down, a significant ramp up in proposal efforts, which took significant investment through Q2. and the lack of awards of outstanding bids that we've already submitted. So all that together demonstrated a drop in revenue in the services side of the house, and we were not able to replace quickly enough that Seattle project that was generating significant revenue for us. We're anticipating, you know, we'll win our share of these awards, and as soon as this thing is awarded, we'll be back in action to replace the Seattle project. The one we did win with the Princeton Plasma Physics Lab, we'll start to do that. It's ramping up quickly. We have a number of others that are smaller, and we have a couple others that we're expecting to hear about any day. And we still expect those to start impacting our end of our Q3. On the treatment side of the house, as far as your term cadence goes, we did start seeing things pick up. They've ramped up a little bit every month. We had a couple of very sizable receipts bump from June into July and August that lowered us a little bit towards the end of June. We're starting to see our backlog creep up, but more importantly, we're seeing a lot of of opportunities to bid on waste receipts. And as I mentioned before, we're getting some backlog inventory for our new system in Florida, the VTD. So all those things together and knowing where our clients are going with backlog to move before the end of the fiscal year, we're anticipating looking at a better Q3 than we did Q2. on the Waste Service side of the house particularly. So we're seeing some things pick up. Our sales team is very busy now. You asked about kind of the contrast. In March, we weren't flying anywhere. Our clients weren't meeting with us because they had restrictions on visitors. Now our entire sales team, when I look down the hallway, all the offices are dark. and they're out in the field meeting with folks, going to conferences, meeting with commercial clients, doing presentations, all that kind of stuff. So it's a lot different energy than it was just in March, and that's ramped up through the quarter and provides kind of the energy and optimism we have for where the waste treatment centers are going. It's kind of a long-winded answer, Ryan.
Ryan Hamilton
No, that's great, and I appreciate the color. You touched on backlog. Could you break out what you have between treatment and services currently?
Rashaun
Well, I think I'll let Ben jump in. I think Ben mentioned a 6.7 million backlog at the end of June. I believe, Ben, that was just for treatment, if I remember correctly, and with our services it's a little bit more than that. You want to address that, Ben?
David
Yeah, it's 6.7 was the treatment backlog. Services is in around the 30 to 32 range at the end of the quarter.
Ryan Hamilton
And that is funded. I'm sorry, what was that?
David
That's funded backlog. We track various looks at backlog in the service segment because there's projects with high you know, that you may have one but it's not funded and there's some that are high probability. But what kind of the surest thing is the funded backlog and that was at about the 30 to 35 range.
Ryan Hamilton
Perfect. You touched on SG&A being up a little bit on wages and a couple other things. As you, assuming that COVID kind of drags out a little longer here, are there any other big-ticket items that you could kind of extract out of SG&A?
David
Do you see costs at all? Yeah, we're pretty lean on G&A. There's always some, you know, depending on urgency. But, you know, we're a smaller public company, and certain costs just don't go away, and that's why we're so dependent on and the needle moves so quickly on revenue shifts. You know, again, there is always certain costs, and we're always looking at them on a regular basis. But, you know, if you look at the history of our G&A number, good and bad years, it's always kind of been in a certain range.
Ryan Hamilton
Gotcha. And kind of along those lines, as far as increasing wages, are you, on your bidding activity, are you increasing price?
Rashaun
You know, that's a good question, Ryan. It's pretty flat on the services side of the house. It is very competitive, as our competitors are quite hungry as well. If you listen to some of the other earnings calls from the big boys that we team with, as well as some of the smaller private companies, everyone's waiting for the same bids, waiting for things to be awarded. and projects are being completed, same deal. Everyone's really going through similar cycles. So there is more of a tendency to reduce your fee and your margins, but wages are pretty consistent, and we're not seeing that change dramatically year over year overall. And that's really when it's important to have a technology that can can cut costs, which we have got several that are in our procurement, so we're hopeful we'll be able to show greater value on some of our bids.
Ryan Hamilton
Excellent. And kind of along those lines, as far as bidding activity goes, you've touched a little bit on it. Could you maybe go into maybe the size of the job that you're seeing, you know, that you're putting out bids on, number of bidders, kind of just walk us through that just a little bit more? What the bidding activity looks like?
Rashaun
That's a pretty broad question, Ryan. But in general, you know, we've got the large bids like the Moab one that's been talked about. You know, that's a 10- to 15-year contract, and Lucky is 10 years as well, which is a site in Ohio. And those are big bids with lots of competitors, so it's difficult to really plan on those because they can go many different directions. Most of our other projects are between $5- and $10-million task orders. We've got probably 10 of those we're waiting to hear on. And then we have a couple between $20 and $50 million that we're also pretty optimistic about. And we are pursuing a couple of new markets, particularly with the Navy and their ship program and revitalization program out of Norfolk Naval Shipyard in Virginia. where we're taking our expertise that we've developed in the DOE market for decontamination and decommissioning and applying it to the Navy and their programs for decommissioning as well. So we're optimistic about that number of bids there. And as I mentioned, lots of smaller task force here and there through some of the IDIQs that we have. We've also bid a number of IDIQs. I think we're waiting here on maybe seven or eight. IDIQs, which are pretty much, you know, are licensed to bid, and there will be more bids once those are awarded. We're optimistic that we're going to win five or six of those and know that they're well-funded. But, you know, again, it's just real slow. They've got to award the IDIQs and then start running task force through them. And we're waiting, like everybody else, waiting for that to happen.
Ryan Hamilton
And as we continue to wait for awards to be, I guess, handed out, at what point do these facilities just overfill? I mean, at some point, I would imagine they can no longer delay and it becomes, you know, almost a crisis. Is that a right assumption?
Rashaun
Yeah, I know. What you're speaking about is more the operational waste streams that we get, and there is a certain amount of that that does occur. Most of the projects I'm speaking of are – are cleanup projects. So you can kick that can down a road on cleanup, and it doesn't necessarily achieve the scenario you just mentioned. So those projects will remain. But usually those projects are holding up something else. In other words, if you've got a contaminated building, you want to get rid of it because you want to put something else there or meet a milestone. So there is a driver typically, and that's what we're hoping will start getting into place here in the next couple of quarters.
Ryan Hamilton
Okay, thanks a lot for your time, guys. I appreciate it.
Rashaun
Thanks, Ryan.
Operator
Again, ladies and gentlemen, to ask a question at this time, please press star one on your telephone keypad. Again, for questions, please press star one at this time. Up next, we have Steven Fine. Steven Fine, please state your question.
Steven Fine
How are you guys? Good to hear everyone's okay. Hi, how are you doing? What's an IDIT? I've never heard that term. Okay.
Rashaun
IDIQ is Indefinite Delivery Indefinite Quantity Contract. So it's like what they call a MATOC, which is a multi-award task order contract. And it's basically what the government does is they'll award to somewhere between three and ten contractors. And what the value of that is, Stephen, is when they make those awards, then they don't have to shoot out full RFPs for every project. They basically pre-qualify you on your experience, on your financials, your capability, and all that, and they just send out a scope of work and a price sheet, and it can do task orders very quickly. for a predefined or prequalified group of bidders or companies. So it's a way to accelerate contracts that have lots of different task orders that go through them or projects that go through them in the next five years kind of a thing. When you win a contract like that in IDIQ, you don't win any value, so we don't take value on it, but you are in a position with reduced competition and reduced investment for when the task orders come out. You can bid quickly. They award quickly, and it's not a big investment.
Steven Fine
All right. The $5 million that was forgiven, was that money used up, or is that? Is that money there or was it used up?
David
Well, it's part of, you know, it wasn't a timing thing. We got it last year. We got it in April of 2020. And, you know, we're at 7.3 now. So it just was all part of the bank account.
Steven Fine
So there's actually cash there or is this just an accounting thing?
David
No, no, no. The cash balance on the balance sheet is a cash balance, yeah.
Steven Fine
All right. And while I have you, Ben, when you mentioned there's a $30 million backlog for service, is that supposedly going to be multi-quarter business or just the next quarter or this quarter?
David
Yes. Yeah, that is all our projects at the point in time, and therefore – You know, some contracts might be they may run over a year, a year and a half. Others may be short, short burn. So that really doesn't give you an indication of.
Steven Fine
Yes, that doesn't give you an idea. All right. And then the other the other question is, when you were talking about your cost of goods, you mentioned that in there is a cost related to bidding. How much is that?
David
That would be in the G&A, not the bidding.
Steven Fine
Yeah, yeah.
David
We were about $300K over from prior year, and a large chunk of that is twofold. One, as Mark mentioned a few times, the bidding activity was pretty intense, and so we had to bring in health contract, outside contract costs. And then the other piece of that, and it kind of goes back to an earlier question about managing our G&A, many times we'll bring in costs related that would be billable in other times, and that increases the G&A number because you use them on a bid and proposal project. So when a new project comes in, they move into cost of goods sold and are tied to revenue, and that kind of is another way that it manages your G&A costs.
Steven Fine
Got it. Okay. So is it – I guess I'll direct this to Mark. I mean, you know, understanding everything that's going on, is it – do you think it's feasible that we'll equal last year, this year, I mean, do $100 million?
Rashaun
Steve, I don't believe $100 million is attainable this year. Okay. Based on – just based on – what's happening with COVID right now in Q3. You know, if you would have asked me last quarter, I probably would have felt a little more optimistic about it. But, you know, DOE is kind of waiting to see on where things are with getting back in the field to a certain degree. Having said all that, I think we can get real close to a fourth quarter that would represent $100 million burns. In other words, $25 million in that quarter. I think it's attainable. Yeah, if they get some things awarded. And we're on the winning end of them.
Steven Fine
With regard to COVID, are you requiring your people to get vaccinated?
Rashaun
I was wondering if we could get that question, Steve, to go on to get to that question. We are not at this point, but we are on that path. We're heading in that direction, and we're waiting for a couple things to happen. Right now, we just did a survey internally, and we're in about the mid-70s percent vaccinated, which is pretty far above the national average. We have about 15% of our staff in that survey have said that they intend to get vaccinated. So I feel confident that we can be in the mid-80s percentage vaccinated in the next couple weeks based on that survey. Having said that, so I'm pretty comfortable there. We don't have a lot of cases overall in the company, but we do in the areas that we live in. But having said all that, if the government goes to a mandate, we'll likely follow those mandates. And right now, you've probably heard the Biden administration. Yeah, so if the government has it for their government contractors, I can't say for certain that we would implement it right away, but I certainly think it's highly likely we will.
Steven Fine
I thought I heard that the military was being, you know, they were required in the military to be, but, you know, I mean, wherever you are, for lack of a better word, politically, And with all that's going on and you've got enough troubles with the business and so forth, certainly one would not throw into the pot. One would think the possibility that somebody unvaccinated could impact your crippled operation at this point. So I'm very strong on that. on that being, you know, essential. All right. You have business out in, what was it, Transuranic? Was that it that you would get from CHM2 out in Hanford? Is that true? That's past it. Yeah.
Rashaun
Are you getting that back or what? No. What happened was they changed contractors out there on that Plateau contract at Hanford, which is an enormous contract, as you know. The administration has changed the headquarters, and they determined they need to make some adjustments to the way they ship waste, which is not a big adjustment, but it does require some permit changes. These permit changes have been ongoing for shipping. And those are expected to be in place in the next month or two. And once those are done, then they'll start to resume shipping again for the transuranic. And that's been a very big impact to us overall to get that program back in place. And we're optimistic that that will be in place in September timeframe, maybe October, and get back to normal in those shipments.
Steven Fine
For just as a, I guess, for lack of a better word, a sarcastic comment, I note that the new contract winner for that, the old CHM2, you know, includes people from AECON who, you know, at least from my read, have been obstructive to you in the past. So, you know, again, I'm being, you know, if I'm out of line, I'm out of line. All right. With regard to the TBI, why all of a sudden, I mean, if you did the three gallons, you didn't have to do an environmental study before the three gallons? I mean, why all of a sudden did they want an environmental study for the 2,000 gallons?
Rashaun
I'm trying to recall. Was there an EA for the three gallons? Do you remember?
spk07
No, we determined they didn't need it for that size project, so it was not required for the three gallons.
Rashaun
It was a Fonzie, yes, so finding a significant impact because it was so small, that's right, yeah.
Steven Fine
Okay, well, I just find, you know, and these are my statements, okay? So I just find this whole situation, the deeper I get in, insane. I mean, there was a – in May of this year, who was it, Gary Peterson and Bob Ferguson came out with an article in the paper out in, you know, to try – Tri-City paper, and in there they point out that the present vitrification plant is dysfunctional, that it will create a gallon of waste for every gallon that they treat. And so with the escalating costs and so forth, if that's so, the whole thing is just insane and absolutely makes no sense. you know, it's just, you know, and then, you know, we're witnessing with all, with the fact we're witnessing, you know, the effects of climate change, which has to, you know, which one reasonable person would think would continue, you know, where are they going to find money to pay, you know, extra money that's obviously, costs have escalated there. I think, what is it, two years ago, they said it went up to about $400 or $500 million or a billion dollars. And with all the money that's been pumped in the economy, I guess it'll be more expensive. So the whole thing to me is just you know, it just doesn't make sense. It's insane. It's just insane that, you know, what you can offer, you know, I mean, the process, from what I understand, the process has been proven at Savannah. The science is proven. It just seems to me maybe, again, being cynical that, you know, People do not want you to succeed. But, you know, I made my comments. There was a, you know, clearly the world out there wants vitrification, whether it's real or not. My last question, which I didn't understand, is you spoke about a TSCAR system versus what is that, the Avantech system? What's a TISCO?
Rashaun
Thanks, Steve, for pointing that out. I didn't mention TISCO. That's an acronym that I'm sure very few people know about. It's the Tankside Seize and Removal System, which is a very well-engineered system that DOE and its contractors have developed to remove tank waste quickly and efficiently and take out some of the higher-level radionuclides, cesium and iodine, out of the system. process stream. In other words, as the waste is rising through the system, it will remove it through the ion exchange system. So what that does is takes out some of the re-nucleized so that we can call this low-level waste and send it to us to treat it. That system, which is very, very similar to the one at Savannah River that you just mentioned is operating very well, is in development and testing at Hanford now. And that system could be used to extract tank waste very quickly and efficiently once it's gone through the readiness process and demonstration process. Or we could put the system in that was designed for this application just for us. Either way, we'll take the 2,000 gallons, however we can get it. But the TISCR system, which is the one they're developing now, would be very efficient and would demonstrate how it works and could be used very efficiently and provide the opportunity to keep the waste coming after they do the demonstration.
Steven Fine
All right. So my readings were – so is this test your system? You have stuff – the Avantech is by the – is this next to the tank? Yes.
Rashaun
Yes.
Steven Fine
So how does this differ? I mean, I read that they actually approved the Avantech system, and there were even articles subsequent to that where supposedly they purchased huge containers where they were going to store the waste into the containers and then it would go, you know, for treatment. So is that the same thing we're talking about?
Rashaun
That's the same thing we're talking about, yeah.
Steven Fine
Yeah, yeah, okay. All right, all right. All right. Well, I, you know, the thing, I guess, look, I think you guys, your attitude is great. I, you know, you couldn't ask for, you know, the, you know, it's a tough area. And, you know, I applaud the effort and everything, but This TBI thing disturbs me because number one, you know, even if you looked at this as a support function for, you know, for the Vic plant, which as I understand is not going to be even big enough to handle everything, you know, a smart businessman would have a backup. And the way this is moved, the way this is structured, after all this time, this to me reminds me of how long it took you to get the three gallons. And we're talking next summer. And why next summer? I mean, why can't this, you know, why can't there be a little urgency? But again, that's my thought process. My hope is with all this other stuff you're doing, that you'll become a $200 million company by the end of 22 or thereabouts. And if something like this happens, it happens and so forth. But, again, look, it's tough times. I applaud you guys. I most importantly applaud your attitude. I think your attitude is fabulous. You know, you're looking ahead. You've gone through tough times. And just keep it up because, you know, the old story is the people win when you're there in the end, you know, who don't give up. Thank you all.
Rashaun
Thank you, Steve. Appreciate the kind words.
Operator
There are no further questions at this time. Ladies and gentlemen, this does conclude today's Q&A. I would now like to turn the call over to management for any closing remarks.
Rashaun
All right. Thank you very much. I'd like to thank everyone for participating in our second quarter conference call. As we said, we remain extremely bullish on the outlook for business and believe we're extremely well positioned for growth. We appreciate the continued support of our shareholders. and look forward to providing further updates as developments unfold. Thank you.
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