Perma-Fix Environmental Services, Inc.

Greetings. Welcome to the Permafix fourth quarter and fiscal 2024 business update conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the former presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Wallman, Investor Relations at Permafix. David, you may begin.

Thank you and good morning everyone and welcome to Permafix Environmental Services fourth quarter and year-end 2024 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 fourth quarter 2024 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 year of that bear upon forward-looking statements. In addition, today's discussion will include references to non-GAAP measures. ParmaFix 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. Thank you, David, and good morning, everyone. As we close out 2024, we acknowledge that it was a challenging year, primarily due to ongoing yet temporary delays in project starts, procurement cycles, and waste receipts. largely driven by the continued resolution for the federal budget. These headwinds persisted into the fourth quarter, leading to revenue shortfalls. However, it's important to emphasize that these challenges do not reflect our long-term outlook. Towards this end, I'm pleased to report that we're already seeing improvement in Q1. Our waste treatment backlog is strengthened, and we expect a meaningful increase from Q4 levels. Waste volumes are improving, and we have added plant operating shifts at key facilities to meet rising demands. This progress, combined with improving project visibility, positions us for a return to growth and profitability in 2025 with particularly strong second half as key programs ramp up. One of the most significant contributors to our expected growth is the direct-feed low-activity waste program, also known as DFLAW at Hanford, which remains on track to begin initial tank waste treatment operations this summer. DOE has reaffirmed its legally binding milestone of August 1st. when waste treatment activities are expected to commence, which would mark a major milestone for the industry. Our PermFix Northwest facility is well positioned to support effluent treatment from Hanford's vitrification process. We've already initiated design and planning activities to ensure we can meet DOE's requirements as waste volumes scale up. The long-term opportunity associated with this program projects to support up to 8,000 cubic meters annually, with ramp-ups expected in phases over the next two or three years. Additionally, we continue to pursue subcontracting opportunities under the Integrated Tank Disposition Contract at Hanford, also known as the ITDC, a multibillion-dollar project with significant small business participation requirements. As DOE finalizes its broader tank waste remediation strategy, we believe Permafix is well-positioned to play a key role in supporting these efforts. We're also beginning to see the results of our expansion in the industrial waste market under the leadership of our Permafix Florida facility. This focus has included broadening our client base to larger government contracts for industrial hazardous materials and waste streams within the southeast region that could benefit from our experience and treatment and the disposition. On the government contracting side, while federal budget delays impact procurement cycles in Q4, We remain well positioned for upcoming DOE and DOD opportunities. One of our most significant recent wins is our role in DOE's West Valley Demonstration Project, a 10-year multi-billion dollar contract which began its transition in Q1. This project aligns with our expertise in radiological protection and waste management. We expect revenue contributions from this project to scale through 2025 as the project is further defined and work transitions into execution which is expected to be completed and be operational in early Q3. In addition, our USSX Enterprise decommissioning procurement bid submitted in January remains a highly competitive opportunity, and we anticipate a decision by mid-year. We're also pursuing pipeline opportunities anticipated to be awarded in 2025 at DOE's Y-12 facility, at Lawrence Livermore and Lawrence Berkeley National Lab facilities, and other DOD sites, which would contribute to a robust multi-year growth pipeline. While procurement cycles remain impacted by federal budget uncertainties, we remain optimistic about our positioning for these projects as funding stabilizes. To navigate ongoing federal budget uncertainties, we've proactively implemented cost reduction measures within our nuclear services segment. These actions are designed to align our expenses with our revenue backlog while ensuring flexibility as procurement cycles stabilize. While uncertainty remains in regards to the budget adjustment that may impact some of our larger DOE and DOE clients, we remain confident that these impacts will have limited effect on the DF law effluent waste receipts due to the commitment for DOE to maintain the tri-party agreement scheduled for this summer to begin operations. In addition, The likely adoption of a continued resolution through the rest of this year by Congress, existing budgets are anticipated to remain steady at least through Q4 and limit the impact on waste receipts overall in 2025. As part of our long-term strategy to diversify revenue, we continue expanding our presence in the international market with particular progress in Canada, Mexico, and Europe. The JRC project remains – the JRC project, which is the one in Italy, remains on track with final permit and program documents submitted in December to support treatment operations beginning in late 26. I'd like now to turn to our PFAS destruction technology, which represents one of the most promising areas of growth for Permafix. Over the past four months, our Permafast system has operated at a commercial scale, successfully meeting performance expectations as we continue to optimize operations and refine the engineering parameters for the design of a larger system. We are now beginning to focus on the development of the second generation permafas unit, which we expect will triple processing capacity and incorporate chemical recycling capabilities to improve overall efficiency. Currently scheduled for deployment in late Q3, this unit will have the capacity to process nearly 2,000 gallons of high concentration PFAS liquids daily. Unlike many existing solutions that only concentrate PFAS waste, our permafas PERMAFAST system permanently destroys these compounds in an economical and environmentally friendly manner, creating a clear differential from other approaches. In parallel, we're expanding our R&D efforts to develop PFAS treatment solutions for contaminated soil and filter media, with pilot scale demonstrations planned for Q2. While we're highly optimistic about the long-term potential of this technology, it's important to point out that our PFAS initiatives have required substantial investment, impacting our financial results. However, we believe these efforts are critical to positioning Permafix as a leader in PFAS destruction. On one final note, I'm pleased to announce that Permafix has strengthened its executive leadership team with the recent appointment of Troy Eshelman as our Chief Operating Officer, effective January 23, 2025. Troy brings extensive experience in nuclear and environmental services, and its leadership will be instrumental in optimizing our operations and executing our growth strategy. Looking ahead, we expect a return to growth and profitability in 2025 driven by a solid backlog, improving project execution, and key initiatives gaining momentum. Again, these several factors that support this outlook include strengthening backlog and improved waste treatment volumes, the ramp-up of the DF Law Program at Hanford, expansion of our PFAS treatment capabilities with the Gen 2 Permafast deployment in late Q3, key contract wins including West Valley and multiple DOE-DOD opportunities, and ongoing cost discipline to reduce our cost of goods sold, ensuring flexibility in navigating federal procurement cycles as well. So to wrap up, we're entering 2025 with strong fundamentals and improving revenue trajectory and major opportunities ahead. With our improving backlog, expanding market presence, and innovative technology solutions, we're confident in our ability to drive profitable growth and long-term value for our shareholders. With that, I'll turn the call over to Ben Naccarato to discuss our financial results in more detail. Ben?