Perma-Fix Environmental Services (PESI) Q4 2024 earnings summary

Executive summary

• 2024 was challenging due to project delays, lower waste volumes, procurement cycles, and investment in PFAS technology, mainly from federal budget continuing resolutions.

• Q1 2025 is showing improvement with a strengthened waste treatment backlog and increased plant shifts to meet rising demand.

• Major growth drivers include the DFLAW program at Hanford, expansion in the industrial waste market, and new contract wins like the West Valley Demonstration Project.

• Strategic cost reductions have been implemented in the nuclear services segment to align expenses with revenue backlog.

• International expansion continues, with progress in Canada, Mexico, Europe, and the JRC project in Italy, with waste treatment operations in Italy expected in 2026.

Financial highlights

• Q4 2024 revenue was $14.7M, down 35.2% from $22.7M in Q4 2023; full-year 2024 revenue was $59.1M, down 34.1% from $89.7M in 2023.

• Q4 gross profit was $594K, down from $4.3M in Q4 2023; full-year gross profit was $2K, down from $16.4M in 2023.

• Net loss for Q4 was $3.5M (vs. net income of $81K in Q4 2023); full-year net loss was $20M (vs. net income of $485K in 2023).

• 2024 net loss included $8.2M non-cash income tax expense from a full valuation allowance on deferred tax assets.

• EBITDA loss for Q4 was $3M (vs. $434K income in Q4 2023); full-year EBITDA loss was $13.8M (vs. $3.3M income in 2023).

• Cash at year-end 2024 was $29M, up from $7.5M, mainly due to $41.9M in equity raises.

Outlook and guidance

• Expecting a return to growth and profitability in 2025, with a particularly strong second half as key programs ramp up, especially the DFLAW program at Hanford.

• DFLAW program at Hanford is on track for initial operations in summer 2025, with ramp-up over the next 2-3 years.

• Gen2 Perma-FAS PFAS destruction unit scheduled for deployment in late Q3 2025, expected to triple processing capacity.

• Anticipate being cash positive by end of Q3 2025 as DFLAW and other Hanford waste streams ramp up.

• Targeting $5M in quarterly revenue from Gen2 Perma-FAS, with incremental margins of 70%.