Perma-Fix Environmental Services, Inc. (PESI)

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Perma-Fix Environmental Services (PESI)

Q4 2012 Earnings Call

March 22, 2013 11:00 am ET


Natalya Rudman

Louis F. Centofanti - Chairman, Chief Executive Officer, President and Member of Research & Development Committee

Ben Naccarato - Chief Financial Officer, Chief Accounting Officer, Vice President and Secretary


Jay Albany - SeeThruEquity, LLC

William John Nasgovitz - Heartland Advisors, Inc.

Igor Novgorodtsev

Wayne G. Cadwallader - Elkhorn Partners L.P.

Michael David Potter - Monarch Capital Group, LLC



Greetings, and welcome to the Perma-Fix Environmental Fourth Quarter and Year End 2012 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Natalya Rudman, from Crescendo Communications. Thank you, Ms. Rudman. You may begin.

Natalya Rudman

Thank you. Good morning, everyone, and welcome to Perma-Fix's Environmental Services Fourth Quarter Conference Call. On the call with us this morning are Dr. Lou Centofanti, Chairman and CEO; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing fourth quarter and 2012 year-end 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.

All statements on this conference call, other than the statements 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 within the U.S. Securities and Exchange Commission. 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. I'd now like to turn the call over to Dr. Lou Centofanti. Please go ahead, Lou.

Louis F. Centofanti

Thank you, Natalya, and welcome, everyone. We're very active on a number of fronts that could potentially transform the company, including both nuclear services and treatment. First, we have continued to see issuance of a variety of smaller task orders such as the contract we recently were awarded for technical services at the West Valley Demonstration Project. We are very hopeful that larger task orders will be announced in the coming months. Second, we're now bidding on a much broader scope of projects, including government, commercial and international business.

For example, we recently received award to provide technical consulting for decontamination of the Fukushima Nuclear Power Plant. We were also selected for a collaborative agreement with the Pennsylvania Department of Environmental Protection to assist with a oil shale gas development radiation study related to hydraulic fracturing. While the dollar amount of these projects is modest, they are important from the standpoint to get our foot in the door, at a place like Fukushima, and provide significant credibility in the market as it relates to radioactive waste and produce water from hydraulic frac-ing.

Third and more important, we are making major strides positioning ourselves for treatment of higher activity waste streams. I'm sure all of you have seen the recent announcement of leaks coming from the tank waste at Hanford, which has focused a lot of attention on the tank waste cleanup project. I'd like to point out that our facility at Hanford, the Perma-Fix facility, would be allowed to accept the waste from those leaking tanks today. The facility is set to handle the waste. As you know, we already handle TRU waste. And it's the only commercial facility that can handle TRU.

Also, our namesake process, the Perma-Fix process, would be ideal to treat this material since it is not a high-level waste but TRU waste. And also, I'd point out that we have treated tens of millions of gallons of material with this process, and we have tremendous expertise.

Somewhat related with the tank waste, as you probably saw, that we also -- we announced we formed a partnership with Kurion to deploy their GeoMelt In-Container Vitrification system at our facility. This would allow us to treat a variety of other highly complex waste streams at Hanford and other sites where vitrification would be required or desired, and have no other commercially available treatment or disposal options. We're very excited about what we see are the various options at Hanford right now.

As a result of these and many other similar initiatives under way, we believe we're very well positioned heading into the new year. Although this has been a very challenging year, I'm as positive on the nuclear market as I've been in a long time. Our largest client, the Department of Energy, has been delaying and redirecting funding towards several major construction projects, especially the vitrification plant at Hanford. As I'd mentioned on our last call, this has temporarily affected both Treatment and Services segments.

Also, Department of Energy has experienced major high-level personnel issues over the past year, the most major being the appointment of a new secretary. The candidate there is a strong supporter of nuclear energy and very familiar with the nuclear waste issue, especially at Hanford, having served as undersecretary during the Clinton administration.

I believe the nuclear waste issue is expected to be an important topic during confirmation hearings, highlighting the pressure to accelerate the cleanup effort, especially at Hanford.

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