Perma-Fix Environmental Services, Inc. (NASDAQ:PESI) Q4 2022 Earnings Call Transcript

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So, we are more optimistic than usual. Obviously, ITDC and OSMS are procurements, they can go either way. And we could be really lucky or not lucky. But we feel like we have got enough other things going on that we will continue to see the growth we had before COVID, irrespective of those wins. And hopefully, these wins really transform us if we can get a couple.

Ross Taylor: Alright. Yes, it sounds like they should be transformational. And I would think you probably have reason to be more optimistic than you just sounded, but thank you very much.

Mark Duff: Thank you.

Operator: Thank you. Your next question is coming from Stephen Fein from Fein LLC. Your line is live.

Stephen Fein: Good afternoon. How are you guys?

Mark Duff: Good Stephen. Good afternoon.

Stephen Fein: I have a scripted comment, but I got two questions prior to it. Number one, you mentioned there were labor problems. Are they being rectified?

Mark Duff: Yes. What that comes down to do, Steve, particularly at Hanford, but also in Oak Ridge. DOE has seen €“ as every manufacturing entity really has seen a big gap in labor and particularly with the union folks. And they have been hiring hundreds, and in some cases, thousands of people. And we have lost a number of folks at both Hanford facility and Oak Ridge facility, two the large DOE facilities. They have a little better benefits. We pay €“ our pay is pretty similar, but there are some advantages and disadvantages between each of the firms. But the big pull from those hiring initiatives, we did lose a lot of folks, particularly a lot of folks at Hanford. And that all happened in Q4. It started early Q4 and got worse in first two weeks of December and it really impacted productivity in Hanford between the holidays.

We have hired €“ since then, we hired in December very quickly. We are able to find folks. They did require a lot of training, but they have been in there since. And our general managers were all here in Oak Ridge this week for an offsite. They all reported that labor has not been an issue. There has not been an issue through the month of March, particularly in most of February and that we have got the labor part behind us €“ labor issues behind us.

Stephen Fein: Good. My next question before I read what I wrote. In the write-up, it says there was $1.2 million written off from the medical. Where does that all €“ I understand what that was from. But how does that impact the financials? I mean so what is that? Is that $1.2 million less, or?

Ben Naccarato: Yes. Steve, that was all last year, 2021. And net-net, it was zero because it was within the entity. So, our Medical segment, it was basically writing off money we had invested into the Medical segment. So, Perma-Fix Environmental takes the loss, but medical gets a gain from the write-off. And so it’s a wash in consolidation.

Stephen Fein: Okay. Thanks. Alright. I am going to read a statement. I have lived and selected your company and hopefully, this will be informational. I just wanted to applaud the progress and actions of Perma-Fix. In that vein, I would like to express my thought on today’s unique potential of Perma-Fix. In 2006, I was introduced to Perma-Fix and asked to do due diligence on the company. Among my three degrees, I am an engineer and MBA, I was a hazardous chemical manufacturer for many years. I was a government contractor, but also a business and science consultant who throughout my career, assimilated various technical businesses and opportunities to either commercialize or analyze and report it. Immediately surveying Perma-Fix, I realized there are four plants at the time in 2016 were essentially non-duplicable because of the plant, people, radiation permits and unique ability to handle low-mixed radiation waste.

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