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Perma-Fix Environmental Services, Inc. (PESI)

Q2 2021 Earnings Call· Wed, Aug 11, 2021

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Transcript

Operator

Operator

Good day, ladies and gentlemen, and welcome to the Perma-Fix Second Quarter 2021 Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir the floor is yours.

David Waldman

Management

Thank you, Rushan, and good morning, everyone, and welcome to Perma-Fix Environmental Services second quarter 2021 conference call. On the call, with us this morning are Mark Duff, President and CEO; Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing second quarter 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Cresendo Communications at 212-671-1021. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call other than a statement of historical fact 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 US Securities and Exchange Commission as well as this morning's press release. 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. In addition, today's discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. Now I'd like to turn the call over to Mark Duff. Please go ahead, Mark.

Mark Duff

Management

All right. Thanks, David, and good morning everyone. During the first half of 2021, we continue to experience the impact of COVID-19 pandemic as the federal government has been much slower than the commercial sector to resume normal operations. This was not unique to us but has been experienced across the industry by most of our peers as well. Nevertheless we were able to report a net income of $3 million for the quarter. We have $7 million of cash on the balance sheet and have lowered our bank debt to under $1.5 million. Importantly we've begun to see activity pick up heading into the third quarter and expect a solid second half of the year barring any further slowdowns related to the COVID-19 new strains. Not only did we see things pick up this year, but we also believe we're very well positioned for 2022 as there is a tremendous pent-up demand in both our Treatment and our Services segments. Turning first to our Services Segment. We -- our bidding pipeline is more robust than ever. As I mentioned last quarter our teams have been working around the clock. And we've been developing four or five simultaneous proposals at any given time. This is a direct reflection of the improvements we've made internally and specifically within our bidding organization. As a result we are now bidding on a wide array of contracts collectively valued in the hundreds of millions of dollars. That is -- the fact is that we're not losing bids. The government procurement process has been delayed in these contracts will eventually get awarded. Just last month we were awarded a multimillion-dollar service contract for the Tritium Systems Demolition and Disposal project, which is expected to be completed over the next 18 months. We believe this contract…

Ben Naccarato

Management

Thank you, Mark. I'll start with revenue. Our -- and as mentioned earlier the COVID pandemic really impacted our revenue in both segments as government sites haven't shipped the waste at their historic volumes and have been very slow to award or fund projects in the Service Segment. So as such, our total revenue for continuing operations for the second quarter was $16.1 million compared to last year's second quarter of $22 million, a decrease of $5.9 million or 26.8%. The decrease in the revenue is primarily due to the drop in the Services Segment and that totaled about $5.8 million, while our Treatment Segment was only marginally down from prior year about $134,000. The drop in the revenue in Services was due to the completion of a large projects whose revenue, we've not been able to replace by another project or projects of equal value. For the year-to-date June 30th, our revenue was down $7.6 million or 16.2%. And this drop in revenue comes from both segments as the Service Segment has been impacted again by the completion of certain projects and is down approximately $5.4 million while the Treatment Segment has been impacted by the drop in volume of waste and is down $2.2 million from last year. Gross -- from a gross profit standpoint the quarter was $966,000 compared to $3.3 million in the second quarter of 2020. And the drop in the gross profit was approximately $2.3 million up $2.3 million was primarily from the Services Segment where reduced project revenue impacted gross profit from both a volume and margin standpoint. Also lower volume of waste mix had a minimal impact on the Treatment Segment, while the fixed costs at the plants were -- we were able to keep that fairly constant. For the six months…

Operator

Operator

Okay. Ladies and gentlemen, we have reached the question-and-answer portion of the call. And our first question comes from Howard Brous.

Howard Brous

Analyst

Mark, Ben, first of all, I hope you and your families are well and protected from the COVID. Have anybody been affected by it?

Mark Duff

Management

So far so good Howard. Thanks for asking.

Ben Naccarato

Management

Yes. We're good at the families Howard.

Howard Brous

Analyst

All right. Thanks. That's the most important thing. Let me first start with TBI the filing. When do you expect that filing to the state?

Mark Duff

Management

Right now, they're working on the permit -- the weird permit and I don't know exactly when that's supposed to go in, Howard. I know that the -- that they have scheduled a hearing for the EA for the based on draft comments -- the comment period. That's supposed to happen in the next few months and then, they'll submit the permit to the state. And they're doing it in sequence as opposed to in parallel, which is something we're pushing them to try to consider doing both at the same time. But all that should happen in the next three to four months and support getting to a point of beginning to do this extraction in the spring.

Howard Brous

Analyst

Given that permit, what are the possibilities or probabilities that once you start extracting the 2,000 gallons the spigot stays open?

Mark Duff

Management

It's difficult to speculate, how we're -- we're certainly keeping that option open and we're able to support it staying open. We can do up to 300 gallons a year now with our capability to end with our permit. So, we're certainly promoting that. We need to decide to do that. There's still some question as whether they're going to use the TSCR system, which is much more elaborate pumping and extraction system or the originally designed what we call pump on a stick that was designed just for TBI, which is much slower. And if they use that TSCR system, it will go very quickly and pull out about five times as fast. So that would certainly set this up for a more sustainable approach. I don't know, if DOE has made this decision internally yet. But certainly, one could speculate that if you're treating the tank waste successfully, that they would continue to support that demonstration with greater volume, but it would be speculation to make that assumption.

Howard Brous

Analyst

Okay. Fair enough. Am I missing something, but is it fair to say that a good number of the mid-level executives in the DOE have not been appointed and that's part of the problem of the lack of some of these large awards?

Mark Duff

Management

Yes. It is a fair statement. Howard, I think again, it's really difficult to understand what's holding some of these bids up. As we've mentioned in the last several conference calls, we have pretty sizable spreadsheet of bids that we've submitted with significant award values and commitments for awards have been just continually delayed. One could speculate and I would definitely believe Howard that your statement is true is that, because there is not a -- assistant secretary confirmed by the new administration that there is a tendency to wait for that to occur. And while they do have a good team of folks, they're carrying over from the old administration that are managing things there's just -- it's a natural I think tendency to wait for the new person to arrive to make these big decisions. So, I would speculate across the board Howard that the lack or delays of getting the assistant secretaries in place in many of these cases, it has an impact on the procurement process for sure.

Howard Brous

Analyst

Would that be the same for the EPA with the Navajo bids?

Mark Duff

Management

The Navajo, what you're speaking about is the abandoned uranium mine program and that one is more of a mystery. I have to assume you're correct on that.

Howard Brous

Analyst

Right.

Mark Duff

Management

And that one is more of a mystery. I have to assume you're correct on that. I don't follow the EPA organizational chart, as much as DOE, but I have to assume it's a similar situation. I know, at one time it was funded. I don't know if that's changed.

Howard Brous

Analyst

It was funded.

Mark Duff

Management

Yes. It's a significant program that has a very significant future for us and for other participants. And we were initially informed that task orders would have been distributed months and months ago. So I don't know what's holding it up. We had a difficult time finding information or getting information back from it. And -- but I have to assume you're correct, that it's largely because of administration changes.

Howard Brous

Analyst

Well, the settlement was $1.7 billion EPA with the Navajo. So the contract we're talking about is about $220 million, if my memory serves me correctly, does that sound about right?

Mark Duff

Management

That sounds about -- that's basically the contract value for that. Yes, that's correct.

Howard Brous

Analyst

All right. What about as an example Moab, Luckey, Oak Ridge, the Navy bids. Is that all the similar vein that we're still awaiting?

Mark Duff

Management

That's correct, Howard. There's also, though -- even at lower levels, there's a lot of task orders in the $5 million to $10 million range that don't require that level of approval. And the procurement processes are just moving really slow across the country, in all different organizations. We have task order bids, the DOE, the Corps of Engineers, the Navy all waiting for announcement of award and mobilization. And it's really every level of procurements have been very lethargic in the decision announcement process. So it may not just be the administration issues. I think it's largely COVID related, where it's just a lot of people working from home. And the rush to get back out in the field is not there yet, because our clients are not out in the field yet. So, it's really both. The larger ones are certainly administration dependent, but the smaller ones, I think, are just slow processes in the procurement cycles.

Howard Brous

Analyst

Mark, Ben, wish you the best. Stay safe and good luck. Thank you very much.

Ben Naccarato

Management

Okay. Thanks.

Mark Duff

Management

Appreciate your accord, Howard. Appreciate it.

Howard Brous

Analyst

Bye-bye.

Operator

Operator

Up next we have Ryan Hamilton . Ryan, please state your question.

Unidentified Analyst

Analyst

Good morning, everyone. And thank you for taking my questions.

Ben Naccarato

Management

Hi, Ryan.

Mark Duff

Management

Good morning, Ryan.

Unidentified Analyst

Analyst

Could you -- you touched a little bit in your opening remarks, but could you walk us through the cadence of the quarter? And maybe start with March and kind of just walk us through how March -- or how, like, May look compared to April and so on. Can you just walk us through that if you don't mind?

Mark Duff

Management

Yes. Ryan, March and April, were -- and we talked about this several quarters ago and we had kind of a fiery discussion, I want to say, in Q3 and four last year. So we expected Q2 to be a tough quarter for a number of reasons. Number one, we had targeted and defined an unusually large quantity of large procurements, like the Moab procurement and a number of others that were going to require some investment and positioning that we felt we had a real offering that was going to be very competitive. And we did get that and we got a number of others. So as far as the cadence on the Services Segment, we saw the project in Seattle, which was very good to us for two years, ramped down, a significant ramp-up in proposal efforts which took a significant investment through Q2 and the lack of awards of outstanding bids that we've already submitted. So all that together showed, we've demonstrated a drop in revenue in the Services side of the house. And we were not able to replace quickly enough that Seattle project that was generating significant revenue for us. So we're anticipating, we'll win our share of these awards. And as soon as the thing is awarded we'll be back in action to replace the Seattle project. The one we did win was the Princeton Plasma Physics Lab. We'll start to do that. It's ramping up quickly. We have a number of others that are smaller and we have a couple of others that we're expecting here about any day. And we still expect those to start impacting our end of our Q3. On the Treatment side of the house as far as your term cadence goes, we did start seeing things pick up.…

Unidentified Analyst

Analyst

No. That's great. And I appreciate the color. You touched on backlog. Could you break out what you have between Treatment and Services currently?

Mark Duff

Management

Well, I think, I'll let Ben jump in. I think, Ben mentioned a $6.7 million backlog at the end of June. I believe Ben that was just for Treatment if I remember correctly and with our Services it's a little bit more than that. You want to address that Ben?

Ben Naccarato

Management

Yes. It's $6.7 million was the Treatment backlog. Services is in around the $30 million to $32 million range at the end of the quarter. And that's funded...

Unidentified Analyst

Analyst

Yes. No, I'm sorry what was that?

Ben Naccarato

Management

That's funded backlog. We track various looks at backlog in the Service segment because there's projects with high that you may have won, but it's not funded and there's some that are high probability. But what kind of the surest thing is the funded backlog and that was at about the $30 million to $35 million range.

Unidentified Analyst

Analyst

Perfect. You touched on SG&A being up a little bit on wages and a couple other things. As you -- assuming that COVID kind of drags out a little longer here are there any other big ticket items that you could kind of extract out of SG&A costs at all?

Ben Naccarato

Management

Yes. We're pretty lean on G&A. There's always some. You can -- depending on urgency, but we are a smaller public company and certain costs just don't go away. And that's why we're so dependent on -- and the needle moves so quickly on revenue shifts. Again, there is always certain costs, and we're always looking at them on a regular basis. But if you look at the history of our G&A number good and bad years, it's always kind of been in a certain range.

Unidentified Analyst

Analyst

Got you. And kind of along those lines as far as increasing wages, are you -- on your bidding activity are you increasing price?

Mark Duff

Management

That's a good question Ryan. It's pretty flat on the Services side of the house. It is very competitive as our competitors are quite hungry as well. If you listen to some of the other earnings calls from the big boys that we team with as well as some of the smaller private companies. Everyone's waiting for the same bids, waiting for things to be awarded, and projects are being completed the same deal. Everyone is really going through the similar cycles. So there is more of a tendency to reduce your fee and your margins, but wages are pretty consistent, and we're not seeing that change dramatically year-over-year overall. And that's really when it's important to have a technology that can cut costs, which we have got several that are in our procurement. So we're hopeful we'll be able to show greater value on some of our bids.

Unidentified Analyst

Analyst

Excellent. And kind of along those lines as far as bidding activity goes you've touched a little bit on it. Could you maybe go into maybe the size of the job that you're seeing -- that you're putting out bids on number of bidders kind of just walk us through that just a little bit more what the bidding activity looked like?

Mark Duff

Management

It's broad question Ryan. But in general, we've got the large bids like the Moab one that's been talked about that's a 10- to 15-year contract and Luckey is 10 years as well which is a site in Ohio, and those are big bids with lots of competitors. So it's difficult to really plan on those, because they can go in many different directions. Most of our other projects are between $5 million and $10 million task orders. We've got probably a 10 of those we're waiting here on. And then we have a couple between $20 million and $50 million that we're also pretty optimistic about. And we are pursuing a couple new markets particularly with the Navy in their ship program, and revitalization program had an awful shipyard in Virginia, where we're taking our expertise that we've developed in the DOE market for decontamination and decommissioning and applying it to the Navy and their programs for decommissioning as well. So we're optimistic about that number of bids there. And as I mentioned lots of smaller task orders here and there through some of the IDIQs that we have. We also bid a number of IDIQs. I think we're waiting to hear on maybe seven or eight IDIQs, which are pretty much a license to bid and that there'll be more bids once these are awarded. We're optimistic that we're going to win five or six of those. And know that they're well funded. But again, it's just real slow. They got to award the IDIQs and then run task wars through them and we'll wait like everybody else waiting for that to happen.

Unidentified Analyst

Analyst

And as we continue to wait for awards to be, I guess handed out, at what point do these facilities just overfill? I mean, at some point I would imagine they can no longer delay and it becomes almost a crisis. Is that a right assessment?

Mark Duff

Management

Yeah. No, what you're speaking about is more the operational waste streams that we get. And there is a certain amount of that that does occur. Most of the projects I'm speaking of are cleanup projects. So you can kick that can down the road on cleanup, and it doesn't necessarily achieve the scenario you just mentioned. So it – those projects will remain. But usually, those projects are holding up something else. In other words, if you got a contaminated building, you want to get rid of it, because you want to put something else there, or meet a milestone. So there is a driver typically, and that's what we're hoping we'll start getting into place here in the next couple quarters.

Unidentified Analyst

Analyst

Okay. Okay. Thanks a lot for your time, guys. I appreciate it.

Mark Duff

Management

Thanks, Ryan.

Operator

Operator

Up next we have Stephen Fyne . Stephen Fyne, please state your question.

Unidentified Analyst

Analyst

How are you guys? Hope everyone is okay.

Mark Duff

Management

Hi, Stephen.

Unidentified Analyst

Analyst

Hi. How you doing? What's an IDIQ? I never heard that term.

Mark Duff

Management

IDIQ is indefinite delivery indefinite quantity contracts. So it was like, what they call a MATOC which is Multi Award Task Order Contract. And its basically, what the government does is they'll award to somewhere between three and 10 contractors. And what the value of that is Stephen is when they make those awards then they don't have to shoot up full RFPs for every project. They basically prequalify you on your experience, on your financials, your capability and all that and then just send out a scope of work and a price sheet and you can do task orders very quickly for a predefined or prequalified group of bidders or companies. So it's a way to accelerate contracts that have lots of different task orders that go through them, or projects that go through them in the next five years kind of a thing. So it's – you don't – when you win a contract like that in IDIQ, you don't win any value. So we don't take the value on it, but you are in a position with reduced competition and reduced investment for when the task orders come out. You can bid quickly, they award quickly. It's not a big investment.

Unidentified Analyst

Analyst

All right. The $5 million that was forgiven was that money used up, or is that money there, or was it used up?

Ben Naccarato

Management

Well, it's part of – it wasn't a timing thing. We got it last year. We got it in April of 2020. And we're at 7.3% now. So it just was all part of the bank account.

Unidentified Analyst

Analyst

So there's actually cash there, or is this just an accounting thing?

Ben Naccarato

Management

No, no. No. The cash balance on the balance sheet is a cash balance, yeah.

Unidentified Analyst

Analyst

All right. All right. And while I have you Ben, when you mentioned there's a $30 million backlog for Service is that supposedly going to be multi-quarter business or just the next quarter or this quarter?

Ben Naccarato

Management

Yes. Yeah, that is all our projects at the point in time. And therefore subcontracts might be – they may run over a year, 1.5 years others may be short burn. So that really doesn't give you an indication of.

Unidentified Analyst

Analyst

Yes. That doesn't give you an idea. All right. And then the other question is when you were talking about your cost of goods, you mentioned that in there is cost related to bidding. How much is that?

Ben Naccarato

Management

That would be in the G&A not the bidding.

Unidentified Analyst

Analyst

Yes. Yes. So...

Ben Naccarato

Management

We were about $300,000 over from prior year and a large chunk of that is twofold. One we – as Mark mentioned, a few times the bidding activity was pretty intense. And so we had to bring in help contract, outside contract costs. And then the other piece of that and it kind of goes back to an earlier question about managing our G&A, many times we'll bring in costs related that would be billable in other times. And that increases the G&A number because you use them on a bid and proposal project. So when you – when a new project comes in they move into cost of goods sold and are tied to revenue and that kind of is another way that it manages your G&A costs.

Unidentified Analyst

Analyst

Got it. Okay. So is it – I guess I'll direct this to Mark. I mean understanding everything that's going on is it – do you think it's feasible that will equal last year, this year I mean do $100 million?

Mark Duff

Management

Steve, I don't believe $100 million is attainable this year…

Unidentified Analyst

Analyst

Okay.

Mark Duff

Management

Based upon – just based on what's happening with COVID right now in Q3. If you were to ask me last quarter I probably would have felt a little bit more optimistic about it. But DOE is kind of doing a little wait and see on where things are with getting back in the field to a certain degree. Having said all that, I think we can get real close to a fourth quarter that would represent $100 million burn. So in other words, $25 million in every quarter. I think it's sustainable. Yes – if they get the some things awarded we're on the winning end of it.

Unidentified Analyst

Analyst

With regard to COVID, are you requiring your people to get vaccinated?

Mark Duff

Management

I was wondering if we get that question Steve, it took a while to get to that question. We are not at this point but we are on that path. We're heading in that direction and we're waiting for a couple things to happen. Right now we just did a survey internally. And we're in about the mid-70s percent vaccinated, which is pretty far above the national average. We have about 15% of our staff in that survey have said that they intend to get vaccinated. So I feel confident that we can be in the mid-80s percentage vaccinated in the next couple of weeks based on that survey. Having said that, so I'm pretty comfortable there. We don't have a lot of cases overall in the company but we do in the areas that we live in. But having said all that, if the government goes to a mandate, we'll likely follow those mandates. And right now you've probably heard the Biden administration talk about. Yes, so if the government has it for the government contractors, I can't say for certain that we would implement it right away, but I certainly think it's very – it's highly likely we will.

Unidentified Analyst

Analyst

I thought, I heard that the military was being -- they were required in the military to be. But I mean wherever you are for lack of a better word politically and with all that's going on and you've got enough troubles with the business and so forth. Certainly, one would not throw into the pot, one would think the possibility that somebody unvaccinated could impact your crippled operation at this point. So I'm very strong on that being essential. All right. You had business out in, what was it transuranic, it was that you would get from CHM2 out in Hanford. Is that true? That's past bid. You will get business..

Mark Duff

Management

Yes.

Unidentified Analyst

Analyst

Is that -- are you getting that back or what?

Mark Duff

Management

No. What happened was, is they change contractors out there on the Plateau contract at Hanford, which is an enormous contract as you know. And the administration has changed in headquarters the headquarters and they determine they need to make some adjustments to the way they ship waste, which is not a big adjustment but it does require some permit changes. These permit changes have been ongoing and -- for shipping. And those are expected to be in place in the next month or two. And once those are done, then they'll start to resume shipping again for the transuranic. And that's been a very big impact to us overall, to get that program back in place and we're optimistic that that will be in place in September time frame maybe October and get back to normal the shipments.

Unidentified Analyst

Analyst

For just as a I guess for lack of a better word a sarcastic comment, I note that the new contract winner for that the old CHM2 includes people from Aecom, who at least from my read have been obstructive to you in the past. So again, I'm being -- if I'm out of line I'm out of line. All right. With regard ,to the TBI, why all a sudden -- I mean if you did the three gallons, you didn't have to do an environmental study before the three gallons? I mean, why was suddenly they wanted environmental study for the 2,000 gallons?

Mark Duff

Management

I'm trying to recall, was there an EA for the three gallons, do you remember?

Lou Centofanti

Analyst

No. The DOE determined they didn't need it for that size project. So, it was not required for the three gallons.

Mark Duff

Management

It was a Ponzi, yes. So finding no significant impact because it was so small. That's right, yes.

Unidentified Analyst

Analyst

Okay. Well I just find -- and these are my statements, okay? So I just find this whole situation -- the deeper I get in in saying, I mean there was a -- in May of this year who was it? Gary Peterson and Bob Ferguson came out with an article in the paper out in the Tri-City paper. And in there, they point out at the present vitrification plant is functional that it will create a gallon of waste for every gallon that they treat. And so with the escalating costs and so forth if that's so, the whole thing is just insane and absolutely makes no sense. And it's just -- and then we're witnessing -- with the fact we're witnessing the effects of climate change, which has to -- with one reasonable person would think would continue where are they going to find money to pay extra money that's obviously the costs have escalated there. I think what it was two years ago, they said it went up to about $400 million, $500 million or $1 billion. And with all the money that's been pumped in the economy I guess it will be more expensive. So the whole thing to me is just, it just doesn't make sense. It's insane. It's just insane that what you can offer -- I mean, the process from what I understand the process has been proven at Savannah. The science is proven. It just seems to me maybe again being cynical that people do not want you to succeed. But I made my comments. There was -- clearly the world out there wants its vitrification whether it's real or not. My last question, which I didn't understand is you spoke about a TSCR system versus what is at the AVANTech system? What is it -- what's is…

Mark Duff

Management

Thanks Steve for pointing that out. I didn't mention TSCR. That's an acronym that I'm sure very few people know about it. It's the Tank Side Cesium Removal system, which is a very well-engineered system that DOE and its contractors have developed to remove tank waste quickly and efficiently and take out some of the higher level radionuclides cesium out of the process stream. In other words as the waste is rising through the system, it will move it through an exchange system. So what that does is it takes out some of the radionuclides so that we can call this low-level waste and send it to us to treat it. That system, which is a very, very similar to the one at Savannah River that you just mentioned is operating very well is in development and testing at Hanford now and that system could be used to extract tank waste very quickly and efficiently once it's gone through the readiness process and demonstration process or we could put the system in that was designed for this application just for us. Either way we'll take the 2,000 gallons, however, we can get it. But the TSCR system, which is the one we're developing now would be very efficient and we demonstrate how it works and could be used very efficiently and provide the opportunity to keep the waste coming after they do the demonstration.

Unidentified Analyst

Analyst

So my readings were -- so this TSCR system you have stuff -- the AVANTech is by -- is this next to the tank?

Mark Duff

Management

Yes.

Unidentified Analyst

Analyst

So how does this differ? I mean, I've read that they actually approved the AVANTech system and there were even article subsequent to that we're supposed they purchase huge containers where they were going to store the waste into the containers and then would go for treatment. So is that the same thing we're talking about?

Mark Duff

Management

That's the same thing we're talking about, yes.

Unidentified Analyst

Analyst

Yes. Okay. All right. All right. Well, I -- the thing I guess, look, I think you guys -- your attitude is great. You couldn't ask for -- it's a tough area. And I applaud the effort and everything. But this TBI thing disturbs me, because number one, even if you looked at this as a support function for the plant, which as I understand is not going to be even big enough to handle everything. A smart businessman would have a backup. And the way this has moved, the way this is structured, after all this time this, to me reminds me of how long it took you to get to three gallons and we're talking next summer and why next summer. I mean why can't this -- why can't there be a lower urgency? But again, that's my thought process. My hope is with all this other stuff you're doing, that you'll become a $200 million company by the end of 2022 or thereabout. And if something like this happens, it happens and so forth. But again, look, it's tough times. I applaud you guys. I most importantly applaud your attitude. I think your attitude is fabulous. You're looking ahead. You've gone through tough times and just keep it up, because the old story is the people win when you're there in the end, who don't give up. Thank you all.

Mark Duff

Management

Thank you, Steve. I appreciate the kind words.

Operator

Operator

There are no further questions at this time. Ladies and gentlemen, this does conclude today's Q&A. I would now like to turn the call over to management for any closing remarks.

Mark Duff

Management

All right. Thank you very much. I'd like to thank everyone for participating in our second quarter conference call. As we said, we remain extremely bullish on the outlook for business, and believe we're extremely well-positioned for growth. We appreciate the continued support of our shareholders, and look forward to providing further updates as developments unfold. Thank you.