Perma-Fix Environmental Services, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Permafix Environmental Services First Quarter 2022 Conference Call. At this time, all participants have been placed on a listen-only mode, and we'll 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 Waldman, Investor Relations. Sir, the floor is yours.

Thank you, and good morning, everyone, and welcome to Permafix Environmental Services First Quarter 2022 Conference Call. On the call with us this morning are Mark Duff, President and CEO of 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 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 security's Litigation Reform Act of 1995 and includes certain non-GAAP financial measures. All statements on this conference call are then 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 to today's discussion, we'll 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, Dave, and good morning. Results for the quarter? While disappointing, we're very much in line with our expectations as we discussed in our recent year-end conference call. We continue to experience weakness in January and February related to the pandemic and the delays in both our services and treatment segments. That said, we started to see things pick up in March and saw a significant increase in production, which has continued at the start of the second quarter. While within the services segment, we recently commenced several important projects, that are mostly fully operational at this point. In turn, we expect these projects will contribute to improved revenues and profitability in the second quarter. As a result of these latest project awards, we anticipate growth in our services segment revenues of roughly 50% in the second quarter alone. As we see here today, our services project backlog is approximately 58 million, which bodes well for the balance of the year. We anticipate the federal government will be procuring new projects in the second and third quarters that we expect will further contribute to our revenue growth going forward. As I mentioned on the last call, we've been selected on several IDIQ or multi-award task order contracts that include large funding ceilings and open up new markets with the approved federal budget. These contracts provide us the ability to bid on task orders among a select group of companies. With the limited competition, and the scope of work that they provide, we have a good sense of the potential opportunities going forward. We anticipate the government will begin awarding these related task orders in Q2 and Q3. We're also bidding on some much larger service projects within DOE as part of larger teams that will begin to be announced later this year. If we're successful on one or more of these projects, they could contribute meaningful recurring revenues and cash flows on multi-year projects. As I've stated in the past, the federal government has been slow to procure new task orders due to the pandemic. However, these projects have not gone away. We've received information regarding numerous opportunities that we expect to be bidding over the next two quarters. There is significant pent-up demand, and we look forward to capitalizing on this opportunity in a very meaningful way. Within our treatment segment, we're also seeing strong demand for waste treatment capacity as evident in the steady increases in recent requests for quotes from our clients. In addition, we've expanded our treatment services to the commercial utility sector, which has broadened our market base and has resulted in several new shipments in Q2 that will likely represent sustainable revenue for several years. We've completed startup and testing of our new vacuum thermal desorption system and continue to see strong market demand for the system overall, which will be an important component to DOE's mission as well as waste generated by utilities and the oil and gas industry. Overall, we've built a solid foundation for growth, and we're confident the momentum and profitability we've achieved prior to COVID will be realized again as a result of our increased bidding activities, expansion of our waste capabilities and treatment capabilities, and the improved federal budgets. Also, it's worth reiterating the importance of the new 2022 Federal Spending Bill, which allocates $900 million of incremental funding within DOE's Office of Environmental Management. These increases over prior year funding typically support increased waste treatment and other projects which align with our core competencies. We also remain highly encouraged by the outlook of the Testbed Initiative, or TBI, also known as the Low-Level Waste Offsite Disposal Project in support of the DOE Hanford Tank Disposition Mission. The second phase of the TBI project to include the extraction, shipment, and transportation of 2,000 gallons of tank waste to a Permafix Northwest facility located in Richmond, Washington, is anticipated to occur in late Q3. To put this project in perspective and the potential that it holds for Permafix, the DOE was directed by the National Defense Authorization Act, or also known as the NDAA, to enter into an agreement with the Federal Funded Research and Development Center, FFRDC, to conduct an analysis to evaluate approaches for a supplemental treatment of the low-activity waste in addition to the current DOE vitrification strategy. The current DOE strategy includes vitrification of the low-activity waste in a new plant that they're currently constructing called the Direct Feed Low-Activity Waste Plant, or DF Law Plant, under construction, currently scheduled to begin operations in December of 23. The subsequent draft report by the FFRDC was developed by four national laboratories and concluded that the grouting technology appears to be the only alternative that is, quote, technically viable, affordable, and flexible enough to implement under assumed constraints, budget constraint scenarios without significant impact to the waste treatment plant, high-level waste vitrification facility and its mission and schedule for completion. The report further states, and I quote, the DOE should expeditiously implement multiple pathways for off-site grout solidification and mobilization and disposal of low-level waste in parallel with the DFLAW facility. That's the direct feed low-activity vitrification process. According to this report, the implementation of off-site grouting to address the 56 million gallons of tank waste at Hanford would potentially save the DOE as much as $95 billion. That's $95 billion with a B. Even if it's assumed just a modest percentage of that overall savings comes to Permafix, you can see what this project holds in regards to its revenue potential. And Permafix maintains the only capability to provide this treatment in the vicinity of the Hanford site. So I would invite you to look this report up on the Internet, and you can see the executive summary is summarized pretty well. The team that prepared this report is led by DOE's Savannah River National Laboratory, along with the Pacific Northwest National Laboratory, the Los Alamos National Laboratory, and the Sandia National Laboratory, a multi-university consortium, along with the Institute for Defense Analysis and Parsons. As I mentioned in our last call, the recently enacted federal spending bill includes additional $7 million specifically allocated for the testbed initiative in 2022. This funding line item underscores the visibility of and recognition within the U.S. Congress for a commercial grounding approach to supplement the current DF law program while providing significant cost savings and schedule reductions to support the Hanford mission. So to wrap up, it's clear to us that there's a solid federal budget and significant backlog of demand that we expect to capitalize on going forward. As a result, we remain confident the balance of 2022 will see significant improvement over 21. As I mentioned earlier, We are already seeing signs of this improvement in our March performance. We continue to invest in our capabilities and facilities. We have highly scalable infrastructure, and we maintain a solid balance sheet as well. We are currently – excuse me, we are already seeing the turnaround in Q2 and have a much better visibility for the balance of the year. As a result, we believe we're well-positioned to resume ultimately and significantly exceed the performance and profitability we had maintained prior to the pandemic through our increased bidding activities, waste treatment capability, expansion, and the federal budget support. On that, I'll now turn it over to Ben, who will discuss the financial results in more detail. Ben?