Perma-Fix at 11th Annual Waste Symposium: Optimistic Growth Amid Challenges

On Thursday, 03 April 2025, Perma-Fix Environmental Services Inc. (NASDAQ: PESI) presented at the 11th Annual Waste and Environmental Symposium, sharing a strategic overview that highlighted both opportunities and challenges. While the company anticipates significant revenue growth, it also acknowledged recent performance dips due to procurement cycles.

Key Takeaways

• Perma-Fix aims for $200 million in annual revenue, with significant growth expected in the latter half of the year.
• The Hanford DFLaw plant is projected to generate $70 million annually, with operations starting in August.
• International expansion includes a €50 million project in Italy.
• PFAS treatment initiatives are expected to yield $3 million to $5 million in Q4 revenue.
• The company remains optimistic despite potential procurement delays from changes in administration.

Financial Results

• Current Business Base: Targeting $80 million per year, but recent performance averaged $29 million per quarter.
• Hanford DFLaw Plant: Anticipates $70 million in annual revenue, with a gradual ramp-up starting in August.
• International Growth: Secured a €50 million project in Italy, marking a significant expansion.
• PFAS Treatment: The initial prototype facility processes 650 gallons per day, with a second unit handling 2,000 gallons per shift. Expected Q4 revenue from PFAS treatment is between $3 million and $5 million.

Operational Updates

• Waste Treatment Plants: Operates unique facilities with difficult-to-attain permits, including incinerators for radioactive waste in Washington and Tennessee, and a PFAS unit in Florida.
• Growth Initiatives: Focused on larger bids, including a $3 billion job in West Valley, New York. Upgrading facilities to broaden the Total Addressable Market and expanding internationally.

Future Outlook

• Revenue Growth: Aiming for $200 million in annual revenue, with significant increases expected in the latter half of the year.
• Potential Headwinds: Acknowledges potential procurement delays due to changes in administration.
• Key Projects: Includes the West Valley program, PFAS initiatives, and European market expansion.

Q&A Highlights

• DOE Downsizing: No significant impacts observed yet; potential effects may be felt in the ’26 budget.
• PFAS Payoff: Investment expected to yield returns within a year, with high incremental margins anticipated.
• SMRs and Thorium Reactors: Unable to assess waste generation potential at this time.

In conclusion, Perma-Fix remains confident in its growth trajectory, driven by strategic projects and international expansion. For detailed insights, refer to the full transcript below.

Full transcript - 11th Annual Waste and Environmental Symposium:

Unidentified speaker, Perma Fix: afternoon, everyone. Appreciate the opportunity to talk to you all today about Perma Fix. Thank you to Gabelli Funds for hosting us again this year. Anxious to talk about where things are going with Permafix and how things have changed over the last year and how our growth initiatives are setting us up for a really good looking 2026 and 2027 and introduce you to the company if you’re not familiar with us. Our company is broken into two different segments.

One is waste treatment. We have a number of waste treatment plants I’ll talk about in a minute and some technologies that go with each one of those. The other half of the company is our services segment. So basically, the way we look at it is if we are doing work in our treatment plants around The U. S, that’s a waste treatment revenue.

If we’re doing things in the field, such as remediation or demolition or processing waste in the field, that’s our Services group. We’ve seen a little bit of a dip in 2024 in the Services Group, which was somewhat anticipated based on the procurement cycles that we’re in. We’re seeing those revenue potentials increase here recently, and we’ve also seen some increases in the treatment segment as well. We have a very senior management team, everyone with at least thirty years experience in this business. And most of the company are at least eight or nine years, and some closer to 02/1930.

Luciano Fonny there in the middle is our founder. He’s a PhD chemist. He has come up with many of the different treatment technologies that we have today, about 40 different patents, and is a big part of our strategic growth plan, and continues to generate new technologies that are generating revenue. Our primary market overview, we have a large dependence on the Department of Energy. The Department of Energy is responsible for most of the nuclear waste cleanup efforts in the country.

There’s about $8,000,000,000 a little over $8,000,000,000 a year, and last several years of budget cycles associated specifically with cleaning up radioactive waste. So we get a good bit of our revenue, 50% to 60% from that budget cycle or budget segment. Also, we get an additional amount from the weapons program within the Department of Energy. That’s what we call the Nuclear National Nuclear Security Agency, NSA, and they’re responsible for maintaining and developing the arsenal that we’ve got now, which are largely just a couple of different sites that generate pretty sustainable waste streams as well. Also getting waste from the Navy, but in addition to that, from nuclear propulsion waste, we also are doing ship decommissioning in our services segment where we take ships that have been in the nuclear arena for quite some time are going through decommissioning, and we have the expertise to decommission those, clean them up, put them in a position where they can be free released or scrapped or used for targets and removed from the maintenance arsenal that they have.

Also seeing real growth right now in commercial segments, particularly in oil and gas fracking, which most people don’t realize, generates quite a bit of radioactive waste. When you frac, you insert or inject tens of millions of gallons of water into the subsurface that goes through many different layers of radioactive shales. And when that water comes up, you take out all the solids and you have a waste stream that frequently has overregulatory limits for radioactive materials. So we treat those, and we’re seeing a big increase right now in those receipts as well. Also doing very well in Europe.

The technologies that we’ve developed are not in Europe, and we are deploying those over there, including or excuse me, we’re actually using our technologies in this country to ship waste to us. We treat it, which usually means incineration or some other form of treatment, and then we send it back. So we don’t have to worry about tariffs here. Basically it comes over here, it goes back, it’s a service. And what that offers our friends in the other countries is that we reduce volumes by about 90%.

So most of their long term strategy for waste internationally is storage. If they can get their waste reduced to 90% at a reasonable price, that allows them to store more. Okay, our four plants is what really distinguishes us. They’re very unique plants with very, very difficult permits to attain. Some of these permits could never be duplicated.

For example, at our biggest facility, our Northwest facility in Richland, Washington, is where the Hanford site is. We have a set of incinerators there that incinerates radioactive waste. There’s really nothing like it worldwide. We do most of our international work here as well. We also support the Hanford site.

Hanford site’s far and away the largest single facility within DOE or the government in regards to liability, with a liability of about $600,000,000,000 just to clean it up in the next hundred years or so. We also have a facility just outside of Oak Ridge, Tennessee in Kingston, Tennessee. And that also has an incinerator to incinerate liquid radioactive waste, which is something that no one else has as well. The Florida facility has a couple of new technologies as well. That was our initial facility.

We’ve also put our first PFAS unit in Gainesville. And the last facility that we just attained here recently, which is in Oak Ridge, Tennessee, where I’m located, is the Ewok facility. And Ewok is a facility we’re also deploying a new PFAS unit. We also do a lot of other rudimentary waste treatment technologies there, including sorting out waste that are radioactive and a number of other lower technology types of activities. Okay.

So we have five growth initiatives that really have been in development for the last five to ten years. I want to go through each one of those in detail and kind of show you how we’re seeing our path to a $200,000,000 a year revenue growth is looking like it’s coming into Clear Vision. It begins with our larger bids. So we have a business base right now we try to focus on, which is about $80,000,000 a year. We’re a little bit or excuse me, dollars 80,000,000 a year, about $20,000,000 a quarter.

We’ve been falling a little bit short of that recently, and it’s closer to $29,000,000 a quarter range due to procurement cycles as such that just haven’t had the opportunities in the Services segment to put proposals together and respond to bids. That has been changing the last couple of months. We’re seeing that activity increase dramatically. We used to or used to doing six to eight proposals a month. We’ve been doing one or two up until the first quarter this year.

So we’re starting to see some real movement there. We were selected for a $3,000,000,000 job up in West Valley, New York, just up the road here near Buffalo. We’re with a larger team. BWXT is the company that won, and they have an LLC with several other large firms, Omentum and Geosyntech. We’re their primary small business on the team, so we’re called teaming subcontractor.

And we’re basically responsible for most of the waste management associated with the cleanup of the West Valley facility for the next ten years. So we’re just in the process of transitioning. Right now, the transition runs through June 24. At that point in time, we’ll take over June 25 and be operating the facility for at least ten years. And we’re still in the process of defining what our revenue is going to be based on the scope of work that we’re negotiating with the Department of Energy.

But it is looking very good for the types of work that we provide. Also several other projects I mentioned at Lawrence Livermore National Lab in the Bay Area, along with the Berkeley Lab in Bay Area, and several others within DoD that we’re bidding on that are coming up here or underway as we speak. We’ve also submitted a very important bid for the USS Enterprise with another larger firm. Again, we’re a small business. This is about a $500,000,000 job to decommission the USS Enterprise aircraft carrier that’s had eight reactors on it.

Our job will be to decontaminate the areas around the reactors so they can scrap the entire ship. So that’s set to be announced for award here in late Q2. And we’re hopeful they’re obviously a very competitive bid, but only really one or two other competitors will be in that race. Okay. Our second area of growth is the upgrades to our plant facilities.

Each plant we have has a strategy for broadening its TAM based on what wastes are generated in the market right now, which change all the time based on different organizations are doing from the nuclear power industry to the Department of Energy and DOD. Those things change. We find more difficult wastes that don’t have what we call orphan wastes that don’t have places that can be treated, just have to stay in storage, and we can make the investments to provide technologies to solve that problem and get rid of them. So we’re in the process of upgrading those plants from our last capital raise that we just did a few in December. And that opens up the market for significant chunks of revenue for us, several $20,000,000 different streams that we’re working with in a classified area, a classified waste at our DSSI facility in Kingston, along with our facility in Florida that also has some capabilities that we’re broadening in association with thermal treatment of different types of norm sludges you get from the fracking industry, as I mentioned.

And in our last facility, our bigger one, we’re making several upgrades to support upcoming waste streams that are on their way there with the startup of some new facilities at Hanford, which I’ll talk about in a minute. So basically making capital upgrades to each one of those plants to broaden the potential revenue we can get through those facilities based on where the market’s leading. Hanford really is the big one for us, though. Hanford is where, if you’ve seen the movie Oppenheimer or any other number of movies, that’s where they made the plutonium in mid forties and onward. If you’ve ever been to Hanford or heard of Hanford, what Hanford has been doing since the initial weapons program is when they get liquid waste, they put them in underground storage tanks.

And basically what they’ve been doing over all those decades is as tanks get full, they draw down the liquids out of those tanks through what they call evaporation, put dry materials back in. So most of these tanks are dry, some are peanut butter like, but they’ve got 177 of them now, about 59,000,000 gallons or so. Very, very, very radioactive, very difficult to deal with. Several of those tanks are leaking right straight down and coming close to the groundwater. And it’s certainly by far the Department of Energy’s and the government’s largest single liability from an environmental perspective.

So DOE, in the 2,000 time frame, decided, okay, the tanks are a big deal. We’ve to build a facility that can treat the liquids and the tank waste out of there. So they’ll add water into them, make a slurry out of it, pull it out, send it to a plant that they’ve been building for twenty five years. It cost about $15,000,000,000 The name of that plant is the D. F.

Law plant, the direct feed, low activity waste plant. In that plant, as it was rolling along, they decided this thing is getting so expensive, we’re just going to commercialize all of the waste that comes out of the plant. So as they pump waste out of the tanks, it goes into DF Law. And what they do in DF Law, it’s quite interesting, they mix it with glass beads, and what comes out is a big log of glass, which is a very, very stable waste form in this industry. It doesn’t get any better than that.

You can put that glass in a landfill, it never leaches out, never contaminates or anything. It’s really fantastic as far as long term viability of the waste and protection of the waste goes. It’s very, very expensive. But what people didn’t realize when they were doing this design is when they make that log and they add a gallon of water from that tank into that system, they generate three gallons coming out. So they make a really nice log that they can put in the landfill, but they generate three waste streams coming out.

So they decided what they would do, because this plant got so expensive, is they decided let’s just commercialize all the waste coming out of the plant, we’ll send it out to commercial treatment facilities, and let them make it go away. Well, there’s only one of those facilities in the Hanford area, and that’s our facility. So it’s right 1.2 miles away from the fence of the Hanford facility. They signed a document here called Record of Decision in a 23 time frame. And it basically said very clearly in that document, all of the waste that comes out of DF Law, once it starts, will go to Permafix Northwest.

And we estimate that to be about 8,000 cubic meters a year. So a very dramatic amount of waste. In terms of revenue, that’s about $70,000,000 a year in waste generation itself. So that plant is part of an agreement. It says up top there a holistic negotiation.

That basically is fancy for some legally binding milestones that the government signed up for. That plan is to start based on those agreements on August first of this year. So once that starts, we’ll start to see that revenue come in, couple million dollars a month, and get closer to 6,000,000 or $7,000,000 a month here through the next year. That grounding plant I talked about, that vitrification plant, D. F.

Lod, I talked about will only address about 40% of the underground storage tanks that I mentioned are out hammered. The other half, other 40% of it, they’ve decided because it’s in a different location, they’re going to grout them. What that means is they’re to pump that waste out, and they’re going to send it to a commercial facility. Those facilities will mix it with basically a type of cement, fancy, expensive type of cement, make a big box out of it, and then it can go out to a commercial landfill somewhere and be disposed of. And that’s something else that we’ve been doing for the site for Hanford for many years.

We have the permits to do that right now. But they’ll be generating 3,000,000 gallons a year at roughly 50 to $100 a gallon in the next several years. So that’s a little bit farther behind. I think the DFLaw Plan is pretty solid in regards to funding. Grouting is more susceptible based on cuts and things because it’s still a few years out, but the DFLaw is on track for August 1.

Okay. International growth, as I mentioned, we did win a €50,000,000 project out of Italy to take some bitumized waste out of Ispra, Italy, which is up north, right near the base of the Alps. And we’re right in the process right now of finishing our documentation, getting ready to start exhuming that waste. We’ll pull that out with our partnership with a local company called Campa Verde. We have a fiftyfifty JV with them.

They pull it out. We ship it to ourselves in Richmond, Washington, incinerate it, and send back what’s left over for them to store. So that’s off and running for about a year now. Revenue hasn’t really seen a significant impact because it’s kind of document development. But we’ll start to see some good revenue on that in the ’twenty six time frame.

We’re also working with a partner in Europe right now to build a facility in Europe, The UK, and duplicating our facility that we have up in Washington State, that incinerator I mentioned, over there to really provide a much more efficient operation as opposed to shipping waste across the pond all the time. And that will support several new clients that we have in the European Union, particularly Germany as they’re decommissioning their fleet of reactors, as well as several other clients in the power industry around Europe. Okay. PFAS is number five. PFAS has been a big initiative for us.

We’re putting a lot of effort, a lot of our top talent on PFAS. We’ve been working on this for several years. I’m assuming people know what it is.

Unidentified speaker: I won’t spend a lot

Unidentified speaker, Perma Fix: of time talking it. But as defined by Barron’s, it’s about a $200,000,000,000 market. It’s just beginning to pick up. Our technology is a lot different than anybody else’s. Everyone’s got a different twist on technology.

The reason we’re so confident in ours I’m just going to cut straight to the most important thing, is that ours is very economical. We can run it very inexpensively because we don’t need a lot of heat. We only take our reactor, we put the PFAS in up to about 150 degrees C, as opposed to some of our competitors. And we’ve just completed in October our first prototype facility. We went through bench scale testing and pilot scale testing.

Our initial prototype will do about six fifty gallons a day per shift. We’re still tuning it and getting it just right from an engineering perspective. The technology works great. It does what we call six nines of destruction. In other words, it goes away to the point that we could either deep oil inject it or we could put it in a landfill.

We are working on our second unit. That’s another reason for our capital raise recently. Our second unit will do about three times that or about 2,000 gallons a shift. We are building up our backlog now with partnerships, with generators and other companies to begin to support that in the Q4 time frame, early Q4. And that will be located, as I mentioned, in the Oak Ridge facility.

Also taking this exact technology, which is largely chemistry based, there’s no stack, basically everything is in closed loop. We can also apply that to soils as well as to GAC, which is also a very growing market right now, or activated carbon market, as well as leachates from wastewater treatment plants in landfills. So a very exciting deal for us. We’re just starting to really see the revenue now pick up as we get to more of an operational stage with our prototype unit. Once our new unit gets installed in September, then we’ll be off and running with a lot of other units.

As I mentioned, we did have a rough 2024. We predicted we would based on, as I mentioned, the investments we’re making in PFAS and putting our top folks on it as well as the procurement cycle on the services side. We are seeing that recover through March particularly. And we’ll see the continued recovery through this quarter. And then with Diaflaw coming into play here, hopefully as scheduled by DOE for the summer, we’ll obviously the West Valley program also be kicking off really in the summer and PFAS going in Q3.

And a few other proposals we’re waiting to hear on, we’re looking for a significant increase in revenue here the latter half of the year. Between each segment, they’re kind of completely different in regards to how we account for margins. On the Treatment segment, we have a lot of fixed costs in keeping these plants compliant, keeping all the trained people there. But once we get over a certain revenue base, we start to see margins dramatically increase, which is kind of designated by the graphic on the left. On the right side, the Services segment is just the opposite.

We move staff up and down depending on how much work we have, how much backlog we have. And we have gone down pretty low here, try to cut costs as much as we can to address the reduction in revenue that we’ve been seeing in the last couple of months, couple of quarters. This graphic here is just to show you how things scale in regards to our revenue increases. If you’re looking across the top here, dollars 100,000,000 to $200,000,000 how the impact of EBITDA goes up nonlinearly in regards to covering our fixed costs and putting us in a position of real growth in the next couple of years. Okay.

Just to recap, again, ’twenty four was rough for us. We made it through okay. And now we’re on to some very exciting times for us. We’re seeing several different things increase in regards to revenue generation opportunities with very limited anticipated impact by the change of administrations under President Trump. Obviously, we don’t know everything that’s going to happen.

But in regards to the nuclear waste world, most of this is driven by regulatory milestones and commitments as well as safety. And we do see the potential for some of these procurements maybe to get delayed some that we’re waiting on, but we still have a very strong backlog of opportunities in our pipeline as well as wins that we see coming irrespective of those headwinds. Again, that’s West Valley, the PFAS and the European markets as well. Okay. I think that’s pretty much it for where we are today.

Thank you.

Unidentified speaker: Perfect. Yes, if you want to feel free to take a seat. Just want to briefly turn to the audience in case there’s any questions there. Yes. Given the changes

Unidentified speaker, Audience Member: in the way the administration is going about downsizing, Has DOE, any of their representatives from Chris Wright on down, given you any sense of the disruptions that may occur to your business?

Unidentified speaker, Perma Fix: There really is no we’ve had meetings, several meetings actually, and some meetings next week specifically with the administration. We have not seen any impacts yet. I think from what I understand, the real impact we will see will come in the ’twenty six budget. From a philosophical perspective, the focus on commercialization has been mentioned several times and reducing on-site staff. There’s definitely been a big shift in focusing on how many jobs are created versus focusing on performance based contracts and performance based milestones, which include, particularly at Hanford, the being incentivized the site contractor being incentivized for every gallon of waste they dispose of.

And that’s exactly what we want to see in contracts. If a contractor is motivated to move waste when things happen like for example, this just happened a couple days ago or weeks ago. One of their systems went down that treats waste, They call us. We pick up the waste and keep things moving. That is driven heavily by performance based contracting.

That’s what we want to see, and that’s what this administration brought to the forefront last time as well. So we’re excited about that. Not excited to see what’s going happen in ’twenty six budget, but no one really knows at this point what they’re thinking.

Unidentified speaker: Just wait for the mics on the way here.

Unidentified speaker, Audience Member: Oh yeah, just to follow-up on another aspect to your business, the PFAS, maybe Ben could answer this. The investment in PFAS, is it expected to give us a payoff at any point in the next year?

Ben: Yes, how’s that? Okay. Yes, it’ll have not I guess when you count the year starting when we start to see material revenue, which is kind of early Q3 over a twelve month period, yes, we expect it. It’s like our other waste streams, we’re seeing very high incremental margins. And we believe most of our current staffing can handle it.

It might need one or two people to run a unit. But for the most part, it’s set up at our two existing plants. So we don’t see much incremental fixed and we see a pretty aggressive variable margin. So yes, we think our expectations are for a first year return and a pretty profitable venture overall.

Unidentified speaker, Audience Member: Do you see more of an opportunity in SMRs and thorium based nuclear reactors?

Unidentified speaker, Perma Fix: I wish we could say we see an opportunity there. We’re very tuned, and actually it’s very lucky to be located in Oak Ridge, Tennessee. Oak Ridge has got one of the first sited areas units for an SMR facility through TVA and Keyroys Power. And also Orano has just announced that they’re building a centrifuge plant there for enrichment. But to answer your question, it’s very difficult to really pin down what the waste generation process will be and whether it will be to spend fuel or whether there will be other ancillary contamination associated with managing an SMR unit.

So the answer to your question, we really don’t know. We’re staying in touch with some leadership with firms that are designing units and getting ready to build them. And it’s really unknown how much waste you’re going to generate at this point. We’re not in the spent fuel business. There are other people that are.

It’s a very different business than we’re in. However, what we’re hopeful is that when they change out and maintain the units, they’ll be generating waste. And that will be likely the type of waste we can manage.

Unidentified speaker: Yes, sir? Do foresee for your PFAS technology?

Unidentified speaker, Perma Fix: At this point in time, the first operational the real operational unit, we’re hoping to see in the 3,000,000 to $5,000,000 revenue for Q4. And we projected that unit to do about $5,000,000 a quarter through ’twenty six. That’s not considering adding our other units and optimizing this unit or anything like that. That’s just basically from the investments we’re making now, we’re seeing basically a $5,000,000 quarter in revenue.

Unidentified speaker: Excellent. That was a great job and great overview. And we’re excited about all the things you guys are doing, and we’d look forward to having you back next year. So thank Thank you.

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