Perma-Fix Environmental Services, Inc.

Good morning, everyone, and welcome to the Permafix Fiscal First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Waldman of Crescendo Communications. David, the floor is yours.

Thank you, Jenny, and good morning, everyone. Welcome to Permafix Environmental Services' first quarter 2025 conference call. On the call 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 2025 financial results, which is also posted online. 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 212-671-1030. 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 hereof that bear upon forward-looking statements. In addition, today's discussion will include references to non-GAAP measures. Carfix believes that such information provides an additional measurement on consistent historical comparison of its performance. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is available on 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. We ended the first quarter facing a number of temporary challenges, largely related to delays in procurement and and project activity tied to the federal administration transition. While these factors weighed on our revenue growth, we still delivered a modest year-over-year increase in revenue. More importantly, we exited the quarter with momentum and improving visibility across our key growth initiatives. Our treatment segment showed improvement in the first quarter. After a slow start, waste receipts began to improve toward the end of the quarter, contributing to a backlog that grew to more than $10 million by quarter end. up approximately 30 percent from where we were in 2024. Revenue in the treatment segment increased modestly year-over-year, and we did achieve gross profit improvement supported by higher waste volumes, reduced variable costs, and other efficiency initiatives. We also made targeted investments to support the receipt of new waste, including staffing, training, and facility readiness activities that we expect will translate into throughput gains. Our waste receipts and treatment production at our PermFix Northwest facility from Hanford have increased, with disposal occurring locally to on-site landfills. With our services segment, revenue was down slightly due to delays in federal procurement activity, particularly in early-stage projects. However, gross margins improved significantly compared to the prior year, reflecting proactive cost-reduction initiatives and improved alignment of resources with our revenue backlog. As we move forward, the team continues to to focus on disciplined indirect cost management while maintaining the flexibility needed to support larger project opportunities expected later this year. Our PFAS program continues to advance on multiple fronts. We received our first commercial shipments from the federal government with additional approvals pending. We've also made meaningful upgrades to the system, including the integration of chemical recycling, which is already reducing costs and improving efficiencies on a per gallon process. unit remains on track for Q4 deployment and should expand our processing capacity by at least three times. As more states adopt stricter regulations around PFAS destruction, we see this business as a promising long-term growth driver. We continue to develop strategic partnerships with large quantity generators and have aligned our technology with the PFAS market segment that continues to highlight our technology as superior based on cost, simplicity, and and efficiency for the total destruction of PFAS. We're also tracking legislative activity in more than a half dozen states, which is expected to drive demand for full-scale PFAS destruction technology like ours. In addition, we're encouraged by the recent press release from the new EPA Administrator, Zeldin, announcing that the Trump Administration's position to ensure PFAS remediation policy is a priority through the development of an agency lead for PFAS, and continued assessment of effective and available treatment technologies for the industry to consider. We also remain optimistic about our role in supporting the U.S. Department of Energy's Direct Feed Low Activity Waste, or DFLAW, program in Hanford. The project remains on schedule for an August 1 start, and we're fully prepared to support multiple waste streams as the operations ramp up. This program, part of the broader Hanford tank remediation mission, has the potential to generate very significant high-margin reoccurring revenue beginning in Q4 through the next decade at a minimum. On the international front, we saw improved activity during the quarter with growing international waste receipts. We received approximately $7 million worth of waste that we anticipated from Canada, Mexico, and Germany over the past two months, with the remaining portion scheduled for May and June. We also continue to pursue a robust pipeline of federal and commercial projects. These include previously discussed opportunities at West Valley, where transition activities are ongoing, and will continue through the end of June, with initial operations expected to begin in July. While the BWXT-led team finalizes its performance strategy with DOE, we remain optimistic about our role in supporting this decade-long program through revenue contributions, though revenue contributions are not expected to be defined for several more months. We continue to actively pursue subcontracting opportunities under the DOE's Integrated Tank Waste Tank disposition contract at Hanford, while DOE is still finalizing its broader tank waste remediation strategy, we remain well aligned with the technical requirements of this program and have begun to participate meaningfully through increased waste receipts at our Permafix Northwest facility beginning in March to support the tank closure mission. In addition, we're pursuing several other large-scale DOE and DOD contract opportunities expected to be awarded in 2025, including at sites such as Y-12, here in Oak Ridge, Lawrence Livermore National Labs, and Lawrence Berkeley National Lab in California. We're also awaiting the outcome of our USSX Enterprise decommissioning bid, which remains a highly competitive opportunity with an award expected around mid-year. As part of our long-term strategy to diversify revenue, we are expanding our presence internationally through strategic partnerships. This includes the JRC Italy project, where we just submitted our final permanent documentation in Q4 of last year, and remain on track to initiate treatment operations in late 26. Our broader international expansion efforts include Europe and Latin America and continue to focus on engaging established generators of radioactive and hazardous waste that can benefit from our treatment capabilities. Internally, we've continued to apply disciplined cost management while we're maintaining flexibility to support incoming contract activities. Our nuclear services team is aligned has aligned our indirect expenses with near-term backlog visibility, and the operational readiness steps we took during the quarter are already contributing to an improved throughput at our key facilities. Looking ahead, we anticipate stronger performance in the second half of 2025. Our outlook is supported by five key drivers, including our growing waste treatment backlog, improved visibility on federal procurement activities, the ramp-up of the DF Law program at Hanford, continued PFAS technology advancement and commercial traction, and execution of large-scale domestic and international opportunities, including the DOE and DOD awards and the European partnerships. With that, I'll turn the call over to Ben Naccarato to walk through our financial results in more detail. Ben.