Welcome to Perma-Fix’s second quarter fiscal 2008 fiscal earnings call. (Operator Instructions) I will now turn the call over to David Waldman with Crescendo Communications.

This morning we have Dr. Lou Centofanti, Chairman and CEO, and Steve Baughman, Chief Financial Officer. The company issued a press release this morning containing the second quarter financial results, which is posted on the company’s website. If you have any questions after the call or would like additional information about the company, please contact Crescendo Communications at 212-671-1020. I would also like to remind everyone that certain statements contained within this conference call may deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements on this conference call other than statements of historical facts 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 with the 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. With that taken care of, I would now like to turn the call over to Dr. Lou Centofanti.

As you know, this quarter has probably been one of the most eventful quarters in the company’s history, the biggest event being the RC winning at the Hanford Plateau Contract. Before I get into that, though, we just had another event occur here that I would like to announce, because of its importance. We just completed funding approximately $7.0 million refinancing from PNCR Bank as part of our $25.0 million credit facility. The new note is a 4-year loan amortized over 7 years, bears an interest of prime +1%. These funds are in additional to our $18.0 million revolver capacity and will provide supplemental liquidity in the forms of working capital and capital investment in future growth of the company. So we’re very pleased with PNC’s continued faith in us and what we’ve been doing. The big event of the quarter, of course, was our team winning the Plateau Contract at Hanford, that we announced in June. As I have discussed in the past, we have been very active in the bidding process for on-site management projects at DOE and we are pleased to report in June that our M&EC division was part of the consortium that won the Plateau Remediation Contract at the Hanford site in Richland, Washington. The project is to clean up the legacy waste that is the result of decades of plutonium production for the U.S. Defense Program. It is basically a cost-plus award sheet contract with a base period of five years and the option to renew for an additional five-year period. As a subcontractor to the project, our M&EC subsidiary will provide waste facility operations expertise in support of the team’s mission to perform remediation clean up and waste management activities for the DOE. In addition, our Perma-Fix Northwest facility, located adjacent to the…

I will now take a moment to go over the results in the quarter. Starting with the income statement, total revenue from continued operations for the first quarter were $15.8 million versus last year same quarter of $13.5 million. The Nuclear segment realized revenue growth realized revenue growth of $2.0 million, or 15.4 %, for the quarter versus the same period last year. Excluding our Hanford operation, revenue decreased by $1.2 million. As we mentioned in our press release results [inaudible] we have seen a slowdown in DOE work during the quarter. Total cost of sales of $10.9 million in Q2 versus last year’s $8.7 million for the same period. Nuclear costs exceeded costs exceeded last year by $2.2 million mainly due to costs generated at our Hanford facility. Nuclear cost of sales excluding Hanford was flat compared to last year. Gross profit for the quarter was $4.9 million, or 30.9% of gross revenue, versus last year’s $4.8 million, or 35.5%. The decline in gross profit was due to lower volume and lower margin projects compared to prior year. Total sales and admin costs in the quarter were $4.0 million versus last year’s $3.8 million. Our Hanford facility accounted for $716,000 in admin costs. Income from continuing operations for the quarter were $399,000 versus $752,000 last year. The loss from discontinued ops was $49,000 versus income from discontinued ops of $470,000 for last year, same quarter. Net income was $458,000 versus last year’s net income of $1.2 million. Net income included a gain on the sale of Tulsa of $108,000. Segment profit for Nuclear was $1.8 million versus $2.3 million last year. Our Engineering segment generated $134,000 in segment profit versus $43,000 last year. Total earnings per share for the quarter were $0.01 versus $0.02 last year. Year-to-date earnings per…

(Operator Instructions) Your first call comes from Robert Braus - Wunderlich Securities. Robert Braus – Wunderlich Securities: Do you have any idea what the split might be on the $40 million to $50 million on management versus treatment?

It’s very difficult to break it up at this point. There’s a lot of flexibility and until we really get into the contract, it’s kind of hard, but it’s 50/50 60% management, 40% off-site, something like that. But it’s very difficult for us to break it up right now. Robert Braus – Wunderlich Securities: Do you have a better handle on the margins for the management side, or you won’t know until sometime in October?

We really won’t know until we get into the project. Again, the whole thing has a lot of ifs, ands, and buts, and until we get into it it’s kind of hard to judge it. And the numbers we gave you I think are pretty realistic. Management fees on the on-site may be, and again, this is based on performance so it’s difficult to give you numbers but it could be 6%, 8%, bottom line. Robert Braus – Wunderlich Securities: And of an addition, besides the 250 employees you are going to add, do you have any estimate as to how much G&A you are going to be able to associate with the Hanford contract?

We should be able to sort some of that G&A but again, it’s until we get into it it’s not clear. Robert Braus – Wunderlich Securities: So the next conference call you will have a much better handle on it?

We hope so.

Your next question comes from Dennis Scannel - Rutabaga Capital. Dennis Scannel – Rutabaga Capital: Just to get a little more clarity, the 6% to 8% bottom line margin you’re talking about for the management portion, is that an EBIT number, is that a net margin number?

That is net. Dennis Scannel – Rutabaga Capital: So all your expenses and any debt you would associate with that contract?

There’s not much debt, that wouldn’t be included, but everything else would. Dennis Scannel – Rutabaga Capital: And on the part that would be actually treating the waste, flowing through M&EC, would that be that traditional kind of 35% to 40% gross margin or again, would the margin structure likely be different?

That would be under our normal contract, normal rates. Dennis Scannel – Rutabaga Capital: Of the 250 incremental employees, can you talk a little bit about how you would be phasing them in? Will we see 250 new FTEs at December 2008 or will they phase in through 2009?

You put in a management team over the next couple of months of 10 people. Then on October 1 you add 220 people. They are basically already there. We will pick up the existing teams that are operating the facility. Dennis Scannel – Rutabaga Capital: And just in terms of thinking of how you kind of manage those incremental costs as the project ramps, so we will see a boost in your labor cost, I guess some of that will flow through cost of goods and some might be in SG&A and will there be revenues to offset that? I know the revenues will kind of increase more in 2009.

No, any costs we incur in the fourth quarter, after the contract starts, are covered by cost-plus-revenue. Dennis Scannel – Rutabaga Capital: The beauty of cost-plus.

The beauty of cost-plus. Dennis Scannel – Rutabaga Capital: A couple of other quick little things. Steve, on the $180,000 gain for Tulsa, did that flow through the discontinued operations net line?

Yes, it did. Dennis Scannel – Rutabaga Capital: So the unit shows a $49,000 loss. We’re not talking a lot, but still we had discussed that those three remaining units are at least cash-flow positive so does that mean that they will continue to lose money at the net line?

No, I think what we will start to see is that actually we will be making money at the net line because the operations that are left over, which is primarily in Florida and Georgia, we expect to be profitable going through the rest of the year.

To expand on what Lou said, we don’t see any drag from industrial going forward. Dennis Scannel – Rutabaga Capital: Could you split out for me, at quarter end, what the actual debt was that would be in the current liabilities as well as in your kind of bulk long-term liabilities?

We have got IRS debt, about $3.0 million. Dennis Scannel – Rutabaga Capital: And that’s in the current?

That’s current. Dennis Scannel – Rutabaga Capital: And then on the long-term side?

Long-term is just our revolver with PNC. Dennis Scannel – Rutabaga Capital: And the total there is now?

$5.4 million. Dennis Scannel – Rutabaga Capital: Now what happened to that Keybanc note? Have you guys paid that off?

No, we still have that and that’s in current. We have another two years on it. And we owe $2.0 million on it. Dennis Scannel – Rutabaga Capital: So is it fair to say total debt at the end of the quarter was $10.4 million? $2.00 Keybanc, $3.0 million IRS note, and the $5.4 million drawn on the revolver.

Yes. Dennis Scannel – Rutabaga Capital: And pro forma we add another $7.0 million that you’ve just extended on the term note but you’ve accepted that cash.

What we’re going to do with that, those funds will go to pay off the revolver. So we will have obviously availability in the revolver so you shouldn’t really see a change in our debt structure.

Your next question comes from Walter Schenker - Titan Capital. Walter Schenker – Titan Capital: Going back to the provisional permit on PCBs and trying to understand what goes wrong from here to there, what’s left to do and have there been any technical complaints, long-term, about that provisional permit to this point?

The draft permit is issued, we had a public hearing, we have not heard anything of significance, either in the public hearing. The questions that came up in the public hearing from some of the people interested in our facility, we’ve given them tours, given them more data. We think everyone has been satisfied. The next step is when the comment period ends, here in two weeks. We will then sit down with EPA one last time and if they have any comments or questions or issues, review them and probably, my guess would be within a month after that, after the end of the comment period, we hope to have a final permit. Now the way it works is it won’t be effective for another month after that. So within about two months we could have our final permit. Or we could actually be treating waste. And we don’t see any roadblocks at the moment. I mean, nothing has come up that would indicate a problem for EPA or anything else. Walter Schenker – Titan Capital: And just to reiterate things you’ve said before, while you will ramp as a function of your success in treating them and your learning curve in treating them, you have a backlog of PCB-tainted waste, which will allow you, once you are allowed to operate, to start and move up as you feel comfortable to a reasonable level of treatment of PCB waste once you in fact start that process.

We have in storage waste we can already treat. And we have identified a lot of waste in both DOE and commercial that we will immediately go after. And we already have, it’s just there’s not a lot of value in trying to move it to our facility and plug up our facility until we’re able to treat it. Walter Schenker – Titan Capital: And this process should be at least as profitable as any other incremental volume through that facility?

The treatment unit operates at about 50% capacity today. If we could double our throughput, the cost of treating extra waste is minimal. So initially it should be a very profitable operation.

Your next question comes from Ronald Rubin - Private Investor. Ronald Rubin – Private Investor: Believe it or not, I think I spoke to you about 15 years ago. I have been a shareholder for many years.

Well, thank you for the confidence and sticking with us. Ronald Rubin – Private Investor: I was just wondering, obviously we have been trading in such a narrow range for such a long time, are we creating any excitement with this news to try and get the word out there and build our share price up a little bit?

As I had one other fairly sophisticated investor call me about a month ago and say, “You know, I’ve been with you now for six years and I look back at what your balance sheet looked like and what you were doing then and what you’re doing today, and the stock price is about the same.” So there has been tremendous improvement both in the basic numbers and our position. I can only say, as I sit here today, I think this thing is worth a lot, lot more. You could just never duplicate what we have, what we’ve put in place, for the value of this company. So I think it’s worth a significantly higher price. And I think as we go into 2009 you’re going to see it on fundamentals. I think you’re going to see numbers on the revenue and earnings side that should support a much higher price. Whether you look at this from a strategic point of view, if you are a major nuclear company trying to get into the U.S. market, you could never duplicate what we have for the value of this company, at two to three times our value right now. So I think it’s there, the value is there, it’s not been recognized. But I think over the next year we should be able to see some of that value continuing to come out. Ronald Rubin – Private Investor: I guess we have a market maker out there that is promoting the stock?

Of course, David Waldman has been promoting it with me. And we have a variety of market makers. We still don’t have an analyst. One of our problems has been that we were so small, up to today, that the analysts have shied away from us. But we have four or five that have been following us closely that are in the space and my hope is to have an analyst here in the very near future that could really lay out the story better than we can, independently of us.

Your next question comes from Al Kaschalk - Wedbush Morgan. Al Kaschalk – Wedbush Morgan: I was wondering if you could just comment, you mentioned the DOE slow down over the past twelve months or last couple of years probably. Where are we at going forward here on the next cycle and when is the time frame for awards under that cycle?

There are several events that have been occurring that have negatively affected funding. In one sense DOE has a basic budget and 90% of it is committed to people and there is very little of a slush fund there. And so when they cut the budget by a very small amount, it really hurts the whole operation. So what we’ve seen over the last year has been one cycle of bidding, which has slowed, really, the waste generation down. Two, we’ve seen a stagnant budget. The President has continued to push to cut the DOE budget. At the same time, Congress has come in and upped the budget. So there’s been a back-and-forth between the two of them. So as we sit today, Congress did not pass the budget for DOE and that’s not necessarily bad because the continuing resolution that they will probably pass instead is not a too bad budget for DOE. It’s better than what the President proposed. So as we sit today, it’s really going to depend on one, the new Congress coming in and how they fund DOE, because we’re sort of right on the edge of how much money they have. And on the other hand, it’s like winning this Hanford contract. For us now, we’ve become a part of the slush fund that’s got to sit there and they’re going to have to pay those salaries no matter what to maintain the facility. So it’s going to be real important what happens with the DOE budget for waste treatment. How much money will they have left over to send waste off-site? In one way they are continuing to try to focus on saving jobs and protecting making the facility safe, so that’s usually the first priority. The second priority then is get waste off-site. So it will depend a lot on the new budget. If it stays about the same we should be in good shape, which I think it will. I don’t think either candidate is going to propose cutting the DOE budget right now. Al Kaschalk – Wedbush Morgan: If we assume that the budget was left relatively flat are there programs that you are looking at and have in mind the time frame over the next 12 months where those would be RFP’d or RPQ’d and awarded?

All the new bids we’re doing are really in several areas. One is for the on-site work. And they’re pretty well all programmed in. We have already bid on the thru-waste operations in Oakridge. I think there were five teams that bid on that so we have a 20% chance on that, if you do simple arithmetic. We think, of course, we’re a little better than that. Then you’ve got two or three projects, the Advanced Mix Waste Facility at Idaho, which we will one way or another bid on. And that’s one of our top priorities. Then we have a couple other projects we’re looking at at this point that it’s probably better to not talk about until we get a little more into them. And then we have the other longer-term one that we’re looking at, is our high-level, high-activity project where we’re looking at options to move into high-level waste, high-activity waste, and that’s mostly through Hanford. So, again, in about six to eight months when I can really talk about the details, if we’re successful in what we’re trying to do, it could become a very exciting project. Dwarfing a lot of the things we’re already doing.

Your next question comes from Dennis Scannel - Rutabaga Capital. Dennis Scannel – Rutabaga Capital: Just a quick follow-up. Do you guys have a backlog figure for the end of the quarter? And then kind of a question of how backlog will be recognized with the Plateau Contract.

How it’s going to be recognized, there’s really two parts to that. Remember, that’s for waste brought into our facility. So for the on-site work, I don’t believe there will be any backlog there. Dennis Scannel – Rutabaga Capital: But as stuff is categorized and what, put on trucks to head to your Tennessee facility, that’s when it would go into backlog?

Or into our Hanford facility. Either one. As the waste goes into our facility then some fraction of it, depending on how fast it’s treated, will go into backlog. Dennis Scannel – Rutabaga Capital: On the tank, the Hanford tank clean-up program that I guess went to Washington Group and Energy Solutions, are there any potential opportunities for you to provided services either through your Northwest facility or other facilities or are you pretty much shut out of that?

We already have a contract there. We already provide services for waste treatment to some of the waste that comes off that project. And then the second we’re working on is the high-activity, high-level waste which is directly related to the tank waste. So we’re looking at options for trying to provide DOE with alternatives for treatment of the tank waste. Dennis Scannel – Rutabaga Capital: And would that treatment be done primarily in your Northwest facility, or also out in Tennessee?

If we’re successful, they would not move that waste across country. So it would have to be done either at or on the Hanford reservation.

There are no further questions.

We appreciate your support, especially you long-term investors out there. We appreciate your listening in and asking questions. And look forward to giving you a further update at the next conference call.