Howard Brous: And congratulations, Mark, Ben, Lou. Great quarter.
Mark Duff: Thank you.
Operator: [Operator Instructions] The next question is coming from Brian Russo from Sidoti.
Brian Russo: Just to follow up on the DFLAW facility. Outside of the second melter and the temperature testing, are there any other major milestones that we should be monitoring to make for the DOE to maintain that second half of 2024 at start?
Mark Duff: There’s a number, Brian. I don’t have this in front of me. But sort of with any facility like this, there’s a lot of safety systems, the readiness reviews, other milestones like that that will occur as they get closer to next summer. So I would expect that other melter we’ve tested here in the near term and then they’ll start going through their operational readiness milestones and checklists and those types of things and report on those most likely as they are successful. And I would — I can get to this to you. They should be on their website, at least several of them and there are some agreements in place with the regulators and the DOE in regards to what these milestones are and we can track that along the way. So if they are available at the DOE, I just have to pull them up the website.
Brian Russo: Great. And just remind me on the Washington State Ecology permit for the 2,000 gallons. Is that in the — is there a public comment period that we’re currently involved in? And how soon after when that permit is granted to the DOE can the 2,000 gallons be shipped?
Mark Duff: Yeah, the permit — RD&D permit is for — it gives DOE the ability or approval to extract the waste from the tanks. They came out with questions for DOE, I want to say this past Tuesday. So 2 days ago. In this questions, they had some technical questions in regards to how the waste is going to be extracted and what they’re going to do with equipment after it is extracted and that kind of stuff. And said that when DOE provide the response to these questions that they’ll go out for public comment and move towards approval. So that public comment has not happened yet. I would speculate that it will be 30 days and it would likely be probably a month from now before we’ve seen anything, because DOE has got to respond to this question, they got to address them and everything else.
And then, DOE would be — once that approval is completed, DOE could start extracting waste in the early fourth quarter. Once it’s extracted, it won’t take long to treat it. And once they finish that demonstration, then DOE is in a position to move towards an operational phase which we’re hoping will be sometime in ’24 period. So again, we’re not — there’s not a date or a specific approach associated with the operational phase. It’s really DOE will tell you they have a road map that includes going to operational phases with the grounding program. And that’s really what we’re focused on is that. Obviously, 2,000 gallons is pretty small. It’s a demonstration and we’re looking forward to the operational phase where we really begin to treat large volumes and make real progress on tank closure.
So, again, we’re expecting that sometime in late ’24.
Brian Russo: Okay, great. And will the Richland facility need a mod to do the operational phase which could be a 1 million gallons?
Mark Duff: We’re set to go with 30,000 gallons a month with our current permit and current facilities. We would have to do a minor mod. And I think to go from 300,000 gallon or — yeah, 300,000 gallon to a million gallon and we’d not expect a problem doing that. And again, minor capital improvements to get there as well. But that would not be a significant delay in getting that in place to make that jump up if we got to those quantities.
Brian Russo: Okay, great. And then, on — what’s the services backlog? You mentioned the treatment backlog but I think services was mark-to-market $30 million on your last call. Just wondering where that stands with the $8 million of new awards in the press release.
Ben Naccarato: Some of that is not in there — I don’t have a current number. Our quarter end number was $22.6 million and that included about 4 of the 8. So probably about $26 million, $27 million of new award.
Brian Russo: Okay, great. And then, just on the margins in each segment. Obviously, significant improvements year-over-year. Are you close to what would be considered normalized? The 22.7% of treatment is normalized, maybe a couple of hundred basis points higher to that based on the $100 million of annual run rate revenue and the services which was 16.6%. Is that at or near kind of the normalized margins?
Ben Naccarato: Yes. I think the Services is — Treatment is probably on the lower end for a reason. The new revenue that we’re receiving at our new plant is going to be a little bit lower margin than sort of our core 3 plants. So that probably brought the number down a little bit. When we get into that sweet spot of $100 million a year, I would — in our regular mix waste, I would have expected a little bit higher but the work we do at the new facility is a little less like the mixed waste treatment. So I think it’s a good number and we could see it go up with a little better performance at our other plants.
