About Perma-Fix Environmental Services

Perma-Fix Environmental Services, Inc. operates as a nuclear services and waste management company. Segments The principal element of the company’s business strategy consists of upgrading its facilities within the company’s Treatment Segment to increase efficiency and modernize and expand treatment capabilities to meet the changing markets associated with the waste management industry. Within the company’s Services Segment, the company continue to bid on projects, increase competitive procurement effectiveness and broaden the market penetration within both the commercial and government sectors. The company continues to remain focused on expansion into both commercial and international markets to supplement government spending in the United States of America (‘U.S.A.’), from which a significant portion of the company’s revenue is derived. This includes new services, new customers and increased market share in the company’s markets. Treatment This segment includes: Nuclear, low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed (Nuclear Regulatory Commission or state equivalent) and permitted (the U.S. Environmental Protection Agency (‘EPA’) or state equivalent) treatment and storage facilities as follow: Perma-Fix of Florida, Inc. (‘PFF’), Diversified Scientific Services, Inc., (‘DSSI’), Perma-Fix Northwest Richland, Inc. (‘PFNWR’) and Oak Ridge Environmental Waste Operations Center (‘EWOC’); and Research & Development (‘R&D’) activities to identify, develop and implement innovative waste processing techniques for problematic waste streams. Services This segment includes: Technical services, which include: Professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering; Health physics services, including health physicists, radiological engineers, nuclear engineers and health physics technicians support to government and private radioactive materials licensees; Integrated Occupational Safety and Health services, including industrial hygiene (‘IH’) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (‘OSHA’) citation assistance; Global technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project management, waste management, environmental, and decontamination and decommissioning (‘D&D’) field, technical, and management personnel and services to commercial and government customers; and Waste management services to commercial and governmental customers. Nuclear services, which include: D&D of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology applications, specialty services, logistics, transportation, processing and disposal; and License termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process: project management, planning, characterization, waste stream identification and delineation, remediation/demolition, final status survey, compliance demonstration, reporting, transportation, disposal and emergency response. A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (‘NEOSH’) instrumentation. The company’s Treatment and Services segments provide services to research institutions, commercial companies, public utilities, and governmental agencies (domestic and foreign), including the U.S. Department of Energy (‘DOE’) and the U.S. Department of Defense (‘DOD’). The distribution channels for the company’s services are through direct sales to customers or via intermediaries. Foreign Revenue and Initiative During March 2022, the company signed a joint venture term sheet addressing plans to partner with Springfields Fuels Limited (‘SFL’), an affiliate of Westinghouse Electric Company LLC, to develop and manage a nuclear waste-materials treatment facility (the ‘Facility’) in the United Kingdom. The Facility is for the purpose of expanding the partners’ waste treatment capabilities for the European nuclear market. It is expected that upon the finalization of a partnership agreement, SFL will have an ownership interest of fifty-five (55) percent and the company’s interest will be forty-five (45) percent. Seasonality The company has historically experienced reduced revenues and losses during the first and fourth quarters of its fiscal years (year ended December 2022) due to a seasonal slowdown in operations from poor weather conditions, overall reduced activities during these periods resulting from holiday periods, and finalization of government budgets during the fourth quarter of each year. During the company’s second and third fiscal quarters there has historically been an increase in revenues and operating profits. Permits and Licenses Waste management service companies are subject to extensive, evolving and increasingly stringent federal, state, and local environmental laws and regulations. Such federal, state and local environmental laws and regulations govern the company’s activities regarding the treatment, storage, processing, disposal and transportation of hazardous, non-hazardous and radioactive wastes, and require the company to obtain and maintain permits, licenses and/or approvals in order to conduct the company’s waste activities. The company is dependent on its permits and licenses discussed below in order to operate the company’s businesses. The permits and licenses have terms ranging from one to ten years. PFF, located in Gainesville, Florida, operates its hazardous, mixed and low-level radioactive waste activities under a Resource Conservation and Recovery Act (‘RCRA’) Part B permit, Toxic Substances Control Act (‘TSCA’) authorization, Restricted RX Drug Distributor-Destruction license, biomedical, and a radioactive materials license issued by the state of Florida. DSSI, located in Kingston, Tennessee, conducts mixed and low-level radioactive waste storage and treatment activities under RCRA Part B permits and a radioactive materials license issued by the State of Tennessee Department of Environment and Conservation, Division of radiological health. Co-regulated TSCA Polychlorinated Biphenyl (‘PCB’) wastes are also managed for PCB destruction under EPA Approval. PFNWR, located in Richland, Washington, operates a low-level radioactive waste processing facility, as well as a mixed waste processing facility. Radioactive material processing is authorized under radioactive materials licenses issued by the state of Washington and mixed waste processing is additionally authorized under a RCRA Part B permit with TSCA authorization issued jointly by the state of Washington and the EPA. EWOC, located in Oak Ridge, Tennessee, operates a low-level radioactive waste material processing facility. Radioactive material processing is authorized under radioactive material licenses issued by the State of Tennessee Department of Environmental and Conservation, Division of radiological health. The combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by the company and its subsidiaries comprising the company’s Treatment segment is very difficult to obtain for a single facility and make this Segment unique. The permitting and licensing requirements, and the cost to obtain such permits, are barriers to the entry of hazardous waste and radioactive and mixed waste activities as presently operated by the company’s waste treatment subsidiaries. Customers The company’s Treatment and Services segments have significant relationships with the U.S. governmental authorities. The company’s Services segment also had significant relationships with the Canadian government authorities. A significant amount of the company’s revenues from the company’s Treatment and Services segments are generated indirectly as subcontractors for others who are prime contractors to government authorities, particularly the DOE and DOD, or directly as the prime contractor to government authorities. The contracts that the company is a party to with others as subcontractors to the U.S. federal government or directly with the U.S. federal government generally provide that the government may terminate the contract at any time for convenience at the government’s option. The contracts/task order agreements (‘TOA’) that the company is a party to with Canadian governmental authorities also generally provide that the government authorities may terminate the contracts/task order agreements at any time for any reason for convenience. Project work under TOAs with Canadian government authority has substantially been completed. A significant account receivable due to the company’s Perma-Fix Canada, Inc. (‘PF Canada’) is subject to continuing negotiations. The company’s inability to continue under existing contracts that the company have with the U.S. government authorities (directly or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material adverse impact on the company’s operations and financial condition. The company performed services relating to waste generated by government clients (domestic and foreign (primarily Canadian)), either indirectly for others as a subcontractor to government entities or directly as a prime contractor to government entities. The company’s revenues are project/event based where the completion of one contract with a specific customer may be replaced by another contract with a different customer from year to year. Research and Development (R&D) The company’s R&D expenses totaled $336,000 for 2022. Governmental Regulation Environmental companies, such as the company, and their customers are subject to extensive and evolving environmental laws and regulations by a number of federal, state and local environmental, safety and health agencies, the principal of which being the EPA. These laws and regulations largely contribute to the demand for the company’s services. The Resource Conservation and Recovery Act of 1976, as amended and its associated regulations establish a strict and comprehensive permitting and regulatory program applicable to companies, such as the company, that treat, store or dispose of hazardous waste. The operation of the company’s environmental activities is subject to the requirements of the OSHA and comparable state laws. The company’s activities are subject to other federal environmental protection and similar laws, including without limitation, the Clean Water Act, the Clean Air Act, the Hazardous Materials Transportation Act and the TSCA. In addition to various federal, state and local environmental regulations, the company’s hazardous waste transportation activities are regulated by the U.S. Department of Transportation, the Interstate Commerce Commission and transportation regulatory bodies in the states in which the company operates. Competition The Treatment segment’s largest competitor is EnergySolutions. Waste Control Specialists, which has licensed treatment/disposal capabilities for low level radioactive waste in Andrews, TX, is also a competitor in the treatment market with increasing market share. These two competitors also provide the company with options for disposal of its treated nuclear waste. History Perma-Fix Environmental Services, Inc., a Delaware corporation, was founded in 1990. The company was incorporated in 1990.