Good day, everyone and welcome to the Perma-Fix Fiscal 2022 Year End Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, David Waldman. Sir, the floor is yours.

Thank you, Matt. Good morning, everyone and welcome to Perma-Fix Environmental Services fourth quarter and year end 2022 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 fourth quarter 2022 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 Crescendo Communications at 212-671-1020. I’d also like to remind everyone that certain statements contained within this conference call maybe 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 and 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 U.S. 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 they are upon forward-looking statements. In addition, today’s call 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. I’d now like to turn the call over to Mark Duff. Please go ahead, Mark.

Alright. Thanks, David and good morning everyone. 2022 was a transformative year as we built a solid foundation for growth in the upcoming year and we are finally seeing a return to normalization and the momentum we had prior to the pandemic. The weakness in revenue we experienced in 2022 was due to the lingering effect of the COVID-19 pandemic on delaying some of the projects in the services and the treatment segments. Nevertheless, we have achieved a 58% increase in gross profit in the fourth quarter, which was due to improved profitability in the services projects compared to last year. In addition, total gross profit margins increased from roughly 7% to 12%. While 2022 was a challenging year, we believe we are back on the growth trajectory, primarily due to the recent improvement we have seen in our Treatment segment. Within our Treatment segment, we have experienced a steady improvement in waste receipts. Specifically, our average receipts per quarter have steadily returned to pre-pandemic levels over the last 9 months of the year. This is best reflected in our backlog, which is $9.2 million at year end, significantly higher than prior quarters. This was a result of increased waste shipments from DOE as well as our efforts to broaden our client base into the commercial utility sector as well as oil and gas and other industrial markets. It’s important to note that the fourth quarter of 2022 was negatively impacted by challenges associated with labor issues and high attrition rates due to the Department of Energy hiring campaigns at several other sites, which are near our facilities as well as supply chain impacts from availability of waste processing materials such as grout mix. We also experienced severe weather impacts due to record low temperatures in the Tri-Cities area of…

Thank you, Mark. Let’s start with revenue. Our total revenue for the – from continuing operations for the quarter was $16.8 million compared to last year’s fourth quarter of $17.1 million, a decrease of $359,000 or 2.1%. The decrease was primarily due to a drop in our Treatment segment revenue of about $290,000 despite a good quarter on the waste receipt side processing, as you mentioned, was impacted by supply chain, labor and inclement weather. Despite these delays, volume did have a positive impact on revenue, but there was an offset from lower average pricing, and that’s not uncommon. It’s just related to waste mix. In the Service segment, revenue was down slightly by $69,000, and that’s really just timing of on-site projects. For the year ended 2022, our revenue was $70.6 million compared to $72.2 million last year. In the Treatment segment, revenue increased slightly by $366,000 due to higher waste volume, and then offset by average – lower average pricing as of the quarter. On the Service segment revenue, it was down by $2 million primarily from the slow start in the first quarter at 2 of our larger projects, but the productivity ramped up production in Q2 through 4. On the gross profit side, gross profit for the quarter was $2 million compared to $1.3 million in 2021. The increase in gross profit of approximately $741,000 was from the Services segment, which was a result of improved profitability of our current projects, worked on which included a 19.8 reduction in project-related variable costs. This improvement was offset by a reduction in gross profit from the Treatment segment due to the processing delays we discussed previously, as well as an increase in fixed expenses at the plants related to labor and utilities. For the year ended 2022, the…

Certainly. [Operator Instructions] Your first question is coming from Howard Brous from Wellington Shields. Your line is live.

Thank you. Mark, Ben, Lou, I hope you and your families are doing well.

Good morning, Howard.

Good morning. So first things first, for full disclosure, I need to say that I was the investment banker to your equity raise of $6.2 million in September of 2021. And in addition, members of my immediate family owned shares in Perma-Fix. So let me get to a couple of important questions. The Department of Energy just published various comments relating to DFLAW. The Record of Decision specifically mentions and only mentions Perma-Fix Northwest as the facility to treat, which seems to be enormous quantities of secondary waste. They talk about 8,300 cubic meters of solid and liquid waste annually, which if I converted that to liquid, which I have questions about, it’s about 2.2 million gallons of – if it’s liquid waste, 18 cubic meters of mid-level waste and 332 cubic meters of mid-level waste. Because it’s a combination of liquids and solids, can you give me a sense of what the annual revenues the Perma-Fix could be starting if you are operational in 2025, as an example?

Sure, Howard. Yes, you really can’t do a real conversion of those quantities, because a lot of that 8,300 cubic meters is debris or other solid waste like PPE or personal protective equipment other things that get contaminated from other things. So it’s difficult to do that. We looked at the various types of waste to be generated compared to what we do now. And as I have mentioned before in the script, it’s about double our total input now for waste of all of our plants combined. And – but we do have, I do want to mention, we do have a contract with the take contractor that will likely be novated and it’s like – it’s an MSA, a master services agreement type of contract. And it’s got rates, and we’ve talked about rates, applying our rates to the volumes of each individual waste stream looks to be about an annual revenue of between $65 million and $75 million a year. So, it is a significant increase in revenue for that plant and the company overall. That $65 million to $75 million could vary depending on how much of which waste stream changes along the way and it can also vary dependent on the radionuclide content that was received. There is the different charges for different types of levels of radioactivity and those types of things. But generally, when that plant is running, the DFLAW plant is running at full capacity, which is right now understand the design capacity for the plant is to treat 1 million gallons a year. When it gets to that level, then I think we will be able to expect over 8,000 cubic meters a year.

And basically, this will be at your normalized treatment margins, is that a correct statement?

Most generally, yes. There is some inflation obviously that’s going to have to occur along the way. The natural gas prices in the Tri-Cities area have gone up dramatically compared to the rest of the country and things like that, labor issues. But yes, generally, the margins will be what we make now on waste treatment as a whole.

Will you need to hire any additional personnel to this specific award?

Yes, there will be. This will be expected, as I mentioned in the script. Right now, DOE is very casual or I should say, informal about when the startup of the plant will occur. Predicting at this point in time, it will be late 2024 and then it will get rolling through ‘25. I would expect them to take 1 year, 1.5 years to get to full capacity if everything went well. And I am sorry, what was your question, Howard?

Additional personnel.

Additional personnel, yes. So at full capacity, I would anticipate between certainly 70 to 75 maybe 100 people.

Additional?

Yes, additional to current staff. Correct.

What you are basically talking about, if I do some numbers, you are talking about earnings just in this contract fully deployed than say 2025 almost $3 in earnings. Does that sound about right?

I am not qualified at this point to do that math, I just didn’t qualify. I haven’t done that math. But it sounds like it might be about the right number, generally.

Okay. Let me continue because the DOE has published probably 1,500 different pages of items. Let’s talk about the TBI. What’s interesting about the TBI comment 2,000 gallons, assuming that’s done by the end of the year? They also mentioned that they have no desire – and this is in the documents, final waste incidental to reprocessing evaluation for the test that initiative demonstration and this came out March 16. And on Pages 4-20, 21 and 22, effectively they have said that they have no desire to do what you and I would look at as the third phase of 300,000 gallons. And this does imply that they are looking to go from the 2,000 gallons assuming successful, right to full capacity. I’d like your comments about that?

Yes. We have had a number of meetings with DOE in the last few weeks about the overall TBI program and I have asked before about that. And DOE’s response has generally been the same as it’s been, as I have described on prior phone calls. And that is that they have a roadmap that they refer to, which integrates their strategy for tank cleanup. It includes – it’s largely based on the DFLAW facility. I know it’s DOE has $14 billion invested in and obviously, decades of construction. Getting that plant up and running and that’s kind of the centerpiece of it. TBI and grouting certainly fits into that roadmap as they refer to it. When it occurs is going to be dependent on when DFLAW gets rolling, funding, how DFLAW facility works, other types of regulatory considerations and those types of things. And in the response to whether they are going to go to 300,000 gallons versus right into a production level, I don’t think DOE has made that decision yet period. Whether they call it TBI or low-level waste offsite disposition, which is what they refer to congressionally that remains to be seen, but the supplemental program for grouting, it certainly seems to be – and I’ve been told is a part of that overall road map. So to answer your question, Howard, whether it’s 300,000 gallons as Phase 3 of TBI, or whether it’s moving right into an operational phase, DOE has laid the groundwork so far from a regulatory perspective from – through the WIR that we mentioned, also through the environmental assessment to support their legal requirements. They have all been done. They have another hurdle to address which is a smaller hurdle with the state of Washington for the RD&D permit, which is required to pump the waste out of the tank that’s shipped to us. Once that’s done, they can start going. And as you know, there is another method of that they are pumping out now to what they call a TSCR, the TSCR pumping waste. DOE has planned on pumping 800,000 gallons this calendar year with that, and putting it in storage for DFLAW. And once that gets full, I think it’s an opportunity to also grout some of that. So we have not agreed to that yet. But it depends on when DFLAW gets up and running if it’s just around the corner or if it’s a good ways off, I’m sure there’ll be opportunities to talk to DOE about that potential as well. So to answer your question specifically, I don’t think DOE has given a lot of consideration to whether it’s Phase 3 of TBI or whether it’s right into an operational phase.

On an operational phase, what kind of capacity could you use in, or – excuse me, work on in terms of, say, 2025?

We can do 30,000 gallons a month as of tomorrow, our permits in our facilities to support that throughput. And we can expand that through a minor permit mod and some minor capital improvements up to 1 million. And with some additional mods, we can get that up to several million. But right now, about 300,000 gallons a year is where our current capacity is, whenever DOE is ready to go.

And this is standard treatment margins again?

Yes, that’s correct.

And would you need additional people to process this?

Up to 300,000 gallons would be about 25 people in total, to run that operation. And a lot of that depends on how fast we’re receiving the waste, whether we go to a second shift or a third shift, or whether it’s over a longer period of time, which we’ve done in the one shift. So that will vary. But 15 to 25 people is probably a good estimate if we were running at full 30,000 gallons a month.

30,000 gallons a month. If you just did that, you’re talking about $0.75 a share, give or take. And go full capacity you can be talking about...

I could verify those numbers, Howard, but that sounds like potentially about right.

Alright. Everybody is going to be wanting to talk to you lastly about ITDC. We’re expecting a decision momentarily. Is that a correct statement?

The DOE has been very difficult to pin down in regards to the schedule and the procurement. Right now, DOE has been consistently saying I’ve been hearing that – it will be some time in – by the end of Q1, which obviously is only a week away. So I have to believe it’s sometime in Q2 for both ITDC and the OSMS. OSMS, they have been more vocal about an award in the May time frame. But the ITDC, I’m going to assume, Howard, is any day. And – but likely in Q2 or at least in April time frame.

The OSMS is a disappointment, is that the one.

That’s – yes. That’s the DUF6 management contract and as well as [indiscernible] infrastructure contract together.

Assume for the moment that your group wins the ITDC contract, which we all hope you do, what does that mean to you other than 15 years, and it’s $45 billion? You’re not doing $45 billion. But what could you be doing as a part of it? And the second question to that is, if you lose because you’re a small business, will you still participate?

Yes. It’s very difficult to answer the question – the first question, Howard. This as I’ve told many investors, this procurement is quite unusual. And it’s so large and so complex, we did not require a baseline schedule or a baseline cost estimate. Which means that there is very little costing provided in very less detail on what each firm, each team member is doing specifically. So it’s like a closure contract in that you will negotiate – the winner will negotiate task orders for all the components of scope during the transition period. At that time, you’ll understand which pieces of the scope specifically you’re going to be contractually required to do, how many people are going to come with it and that type of thing. So, none of that will be defined by any of the winners until after transition is off and running. So I really can’t answer what the overall financial impact is. As a small business, as I mentioned as well in the past, there is a very significant small business set-aside requirement for the winner, a formula of overall revenue. But generally, the small business set aside goals average about $200 million a year, $200 million annually for small business goals. That’s a pretty significant amount. And we still remain a small business, qualified to do that. So to the second part of your question, if we were not selected, we would certainly be a very viable way for the winning team to meet their small business goals as well as provide the value proposition we provide to our team. And we’re highly optimistic that if we don’t win, we will be able to take a good portion of that work, if it’s not already accounted for by another team member.

And I will get back into queue. Mark, best of luck. Thank you.

Okay, thank you, Howard.

Thank you. Your next question is coming from Aaron Warwick from Breakout Investors. Your line is live.

Hey, guys. Thanks for taking the call. And appreciate all of Howard’s questions and your answers to those and give us more clarity. I wanted to talk about Hanford a little bit as well, but also wanted to look more near-term and get some clarity. It sounds like the business has really turned the corner here after the pandemic. And just trying to get a sense of do you expect to be profitable in this fiscal year?

Yes. Q1 looks a lot better than Q4 did, Aaron. I appreciate your question. And Q2 has a lot of things happening that are very exciting, that are projected to be much better than Q1. And so we certainly expect to be profitable in Q2. Q1 is still a couple of things we’re waiting to see come in. But Q2 is very exciting. We have the EWOC facility here in Oak Ridge that we’ve been carrying for a lease for about 3 years now. It’s finally starting to generate real revenue. We’ve got a big project we’re doing there and several others pending. That gets rolling – has gotten rolling here in the last 10 days. It will run at full capacity just about through Q2. And in addition to that, as I mentioned in the notes, we’ve won a number of projects that are all getting rolling in Q2 as well, and that includes the abandoned uranium mines as well as some commercial contracts, a project in San Diego, the Navy. And two or three new projects with DOE at different sites, Los Alamos and Livermore, all get enrolling in April. So Q2 looks really good, and our backlog will be increasing. And some of the headwinds I described before, which includes the labor and supply chain issues, are all really behind us. We’ve replaced a lot of people that have been on board now for 3 or 4 months of their train. They are rolling, and we’re pretty confident that Q2 will be well into profitable range moving forward.

Fantastic. That sounds good. So you mentioned the EPA, and I’ve noticed that they have been moving forward with a lot of different projects that have kind of been delayed because of COVID and other reasons. And the project that you mentioned, if I remember right, you said only probably $1 million this year. But if I remember right, that’s like an $80 million contract over 3 years. Is that accurate?

Yes. Aaron, I believe that IDIQ is a $225 million IDIQ. So there is three teams, we’re with one of those teams providing waste management and radiological services, which is obviously what we do. And so it’s really difficult to say. The last time we talked to EPO, which I’ve not talked to myself, but our folks have, there is been about a dozen sites teed up by the characterization contractor, to bid out and. They just haven’t been through the procurement process. I don’t know the size of those, or the timing or the funding. But I know the ceiling is high. The intent by EPA is to get rolling on these things this year. And that’s one reason why we’re confident that with our technology and the soil-sorting stuff, that it will be a very efficient. And we will be able to – once we get deployed in the field, we will be able to keep it going. So right now, we are only contractually signed up for that first half, but we’re pretty confident that this thing is going to grow, because the contamination and the mission of this thing is so large.

Okay. And then on the international front, you didn’t mention anything about that, but it sounded promising the last several conference calls. What’s the status of that one?

Yes, I mentioned the JRC. I think I summed through that part of the script, Aaron. But the JRC is the Italy contract that we’re counting on, or hopeful for, yes. I don’t know if that’s why I broke down or not. But the bottom line is we’re expecting to hear about the JRC bid any minute. And as I mentioned before, it’s nearly $50 million job. And it will be kind of the seed for our overall European strategy. But overall, to answer your question, we continue to get shipments from Germany. We’re working with one right now, we shipped any day from Croatia and Slovenia, as well as the UK and Italy. So the more we’re shipping, the better we’re getting at it, and more efficient we’re getting at it, to deal with all the logistics and all the paperwork that goes with shipping radioactive material across the Atlantic. So it is going very well. The market is really exploding. And the marketing we’ve done has been very effective to the effect that we’re getting the opportunity to bid on a lot of things. And hopefully, we will see that JRC announcement soon, and then we will start moving forward with the new plant in England, which will kind of be the centerpiece of our European approach.

Alright. Okay. So for Hanford, a couple of things. First of all, I was pleasantly surprised to hear well, at least if I understood it correctly, that even if you’re bidding conglomerate were to lose, and it sounds like there is only two. But even if you were to lose, that you still may get some business because of that small business clause as part of the contract, am I understanding that correct?

Yes, that is speculation and I don’t know the landscape if we were to lose, who the winner is going to have on their team necessarily. So that’s really speculation. But yes, those will be opportunities for that. Again, it’s important to understand, as I’ve told investors, the ITDC is primarily labor and the waste will be separate. And the waste will – for example, DFLAW is part of that contract. To operate the DFLAW and the waste will come out separately as a separate subcontract and not through the ITDC to us. So, the opportunity to do the waste that’s defined in the ROD amendment which is slated to come our way, I won’t say it’s operational. And then there is other opportunities for other waste that we will likely get as well. And then there is other opportunities for labor that – and other small business opportunities along the way. So yes, to answer your question, there will be opportunities as a small business, most likely with the awarding.

Yes. And you had mentioned up to $200 million. That was about my estimate as well, obviously, not necessarily every year, but on an annualized basis. And I’m just wondering that would go to small business. How many small businesses are there? There can’t be that many small businesses that are doing what you do. So I just...

There is – none of our competitors are day-to-day competitors, which are WCS and energy solutions and those types of firms, which are private companies. None of those guys are small business. So you’re absolutely right. It was a very limited small business competition with waste treatment capability. There is a few. There is a couple here in Oak Ridge. There is really not any necessarily in the Hanford area to speak of at this point. But – it’s also very broad scope. There is other things to do. But as far as what we do, there is very limited small business competition in this space.

Okay. Thank you. So speaking of the larger competitors, some of them were mentioned in the final WIR that for the TBI that you had talked about earlier. And I think it caught some people by surprise as you were the only one that was mentioned in the 1% secondary waste. But can you explain what the reasoning is behind that?

Yes, I’m glad you asked that, Aaron, because I do get a couple of questions about that this week. And what it comes down to is the WIR references the environmental assessment that was done for NEPA. So the environmental assessment, the goal of that document is to evaluate alternatives for treatment of the tank waste and treatment disposal. So when EA looks at every alternative available that makes it feasible and it looks at the competition, which includes WCS and Energy Solutions and us. So that – what that WIR referred to is who was evaluated in the EA. And if you look at the EA, there is a number of different evaluations done based on risk, from transportation to safety to environmental hazards and those kinds of things. We were the lowest risk approach because we’re the only ones that are adjacent to the site. The other solutions would have to require transportation of untreated radioactive of liquid to at least 600 miles Energy Solutions and further to WCS. So obviously, the Perma-Fix approach having a facility permitted right next door is the preferred solution. But it did include what was defined in the evaluation for NEPA in the WIR document, that’s why it’s in there.

And so how would they transport that waste to the Perma-Fix Northwest facility?

It will be in totes, and on the back of a large flatbed, most likely. And they’ll bring over several totes a day when at full capacity.

Yes. It seems like that would be rather dangerous to go all the way from Texas.

Yes. Yes, exactly.

Okay. And then I guess the final thing for me would be on the secondary waste that you had mentioned earlier. Really impressive to hear that revenue number. It’s about twice my estimates, so also then twice the earnings per share that Howard had talked about. I guess just to make sure I understand and everyone else understands, I guess this is because of the incremental margins that you would have, given your fixed cost structure, is that – is that accurate? Do you have such higher margins because it’s the incremental, it’s not just what your current margins are?

Yes. I think Howard’s back at the envelope number. This is Ben, Aaron. And I think back of the envelope number is reasonable given our incremental margins. And then as Mark mentioned, there would be some additional fixed costs against that number. But I think, just again, back of the envelope, it’s pretty reasonable given those volumes.

Well, thank you, guys. You’ve done a great job navigating through COVID. It seems glad to hear your – the business is starting to turn the corner there, and going to be profitable. And then obviously potentially lucrative stuff here at Hanford. So congratulations, guys. Thank you.

Thanks, Aaron. Appreciate it.

Thank you. Your next question is coming from Anthony Harpel. Your line is live.

Hi, guys. Good morning. Thanks for holding the call. I have a number of questions, many of which are clarification related, just given there is so many moving parts. Maybe to start out with for the TBI program, can you please clarify what price per gallon you would realistically expect to get paid?

Well, we only get too deep, Anthony, first of all, good morning – into costing the thing. But generally, our established rates that we have in our MSAs are in the low $40 a gallon range for the actual treatment, that’s the actual grouting. So if a container of waste shows up on our dock, in other words, we’re not paying for transportation. And we just have to grout it. It’s $40 to $45. And again, that can change based on rates and the different types of waste received. But that’s generally a good number. In TBI space, if DOE subcontracts to us to deliver those quotes I mentioned of waste to our dock, they would likely subcontract us to route and dispose of the waste. And if that’s the case, and we have to pay for transportation and disposal at an off-site landfill, then that price would be closer to $100 a gallon. So we typically use $100 a gallon for the TBI as an alternative to include treatment and disposal at a Texas landfill, at the WCS. So that’s where those numbers come from.

So do those same rates apply to treating the supplemental low-activity waste from Hanford tanks outside of the TBI program? I assume they are the same?

No, they don’t. It’s a good question. They are different. And the reason they are different is they are important to us and important to the exclusivity of our program. And that is because of the agreements with the state, this waste – the secondary waste is coming off of vitrification, which is what is defined as with the state as the preferred treatment alternatives. So what that means is after the secondary waste comes off at the flow, we can put that waste in the local Hanford landfill. So it won’t go down the highway to Texas and Energy Solutions in most cases, there may be some exceptions. It will likely mostly or largely go back on to the Hanford site into their gigantic beautiful new landfill. It’s designed just for this type of waste. So it won’t go very far away.

Well to be clear, I’m referring to the primary waste. The supplemental low-activity waste you’re doing in TBI, saying once the TBI program is behind us and if this moves into the operational stage of treating the primary supplemental low-activity waste, with the rates that you would be getting paid be the same rates per gallon that you would be getting paid in the TBI program for that primary waste?

I’m a little confused. So there is two different waste streams. There is one, the secondary waste coming off DFLAW. That’s the one that goes back on site. And then TBI, which is, as you said, supplemental, that’s the TBI. So that’s all supplemental, and that would be the $100.

Okay, okay. So can you clarify whether the DOE has officially made a decision to grout secondary waste that are generated by vitrification of the tanks, low-activity waste? Or whether this remains a proposal rather than an official decision?

The ROD amendment is quite a formal document. And it defines DOE’s decision on how to disposition the waste coming off of DFLAW. It goes through a lot of pain and suffering through the DOE to get that ROD amendments approved, and supplemental analysis and that type of thing. So it’s a pretty formal decision in my mind. It will – yes, to answer your question, yes, from my perspective, is the ROD amendment is very formal, and it’s their intent to send the secondary waste on DFLAW for commercial treatment site, off-site treatment.

Okay. Can you please clarify whether the DOE has awarded the tank off-site secondary waste treatment business to you all, to waste control specialists, or to neither of you yet?

They have not made any awards yet, and we would not expect them to do that until the tank gets operating or very close to operating in the high capacity. We – what they’ll do on this, Anthony, most likely and there is some speculation here, is there is – each of the entities we’ve mentioned have contracts with the tank operating contractor, which at this point in time is WRPS. The WRPS is there, notwithstanding who wins the ITDC, where the ITDC will get this contract. We have MSA with them, with established rates that will likely be renegotiated along the way. And when the time comes for them to generate this waste from DFLAW. They’ll put out a task order. Maybe competitive, may not be, I don’t know, but they’ll put out a task order. In the case of this one in the only one company named in the ROD, it will likely just be a task order. We will put in a price, they’ll negotiate with us, and then we will go. So we have a contract in place. They’ll put task orders in place as waste is generated, and that’s contractual approach. That has not occurred yet. And like I said, it won’t likely occur until DFLAW is operated.

And that is a late 2024 event?

Correct.

Okay. And so if you all were to treat the secondary waste that are generated by vitrification of the, say, Hanford tanks low-activity waste. I may have completely misunderstood your comments. But were you implying based on the revenue numbers you had mentioned earlier, that you would realistically expect to get paid around $7,800 a cubic meter? Did I – am I getting that math right? Or did I misunderstand?

Yes. I don’t have a calculator in front of me here, Anthony. But generally, for 8,300 yards, 8,300 cubic meters, we’re estimating roughly $70 million annually in revenue.

Okay. And regarding the ITDC, so are you saying, Mark, that the scope of it as it relates to Perma-Fix only includes services, not treatment?

I really can’t talk about the procurement at all because it’s such a sensitive situation at this point in time. But the scope – the RFP is public information. It includes managing the facilities and waste management, which would include disposition of the tank waste to close tanks. So, it would be a component of scope within that overall contract. That’s about all I can say about the procurement.

So, if I am hearing you right then, it’s – we are talking about a $45 billion contract over 10 years. And it is a possibility that Perma-Fix could generate services business from that contract as well as treatment business from that contract, possible, is that a fair statement?

Yes. It’s possible.

It’s possible for both services and treatment?

Correct.

Okay. And then last question. Can you please give us an update mark on the status of your – of renewing your Northwest facilities dangerous waste regulation permit?

Yes. That permit has been in the renewal process for 12 years. So and we continue to work with the state and provide updates to the permit. It’s right now – boy, Anthony, I think we are still another year off before we are going to see anything finalized. But it doesn’t keep us from operating what we are doing. What it does keep us from doing until we get to the final one renewed is new technologies like the GeoMelt system that we have got in place. We were able to run that through the treatability study for a year or so. But until we get the formal renewal, we can’t do something new like that. So, it is impacting us, from that sense. But the state is going through the process as they have had the last 12 years, and we are hoping to have it completed in about a year, if I remember correctly.

And does it preclude you from treating the waste that we have been discussing through any of these other initiatives?

No, which is demonstrated by the TBI stuff that we have already done and we do grouting all the time now, similar processes. And so we would not expect that, that permit renewal issue or delay have any impact on everything we are talking about here.

Okay. Thank you. Appreciate it.

Alright. Thank you.

Thank you. Your next question is coming from Ross Taylor from ARS Investment Partners. Your line is live.

Thank you. We will shift off of Hanford for a bit. And I would like to talk to you about a couple of things. One, what you are looking at with things such as uranium mines and how long do you think that ends up working out? What kind of opportunities that have generally what other kinds of opportunities are you seeing of that sort around the country that are starting to be freed up? And then I would like to ask you to talk about what you see happening with regard to the Navy. The Navy has a lot of ships, more nuclear capable ships looks like they are going to be coming offline again this year. They are building up what looks like a fairly interesting fleet of mothballed nuclear vessels that they need to deactivate. And where do we stand with the ability to kind of push those major contracts forward?

Sure, Ross. Yes. The EPA program for being randomized, it’s been a while since I have looked at that information. But I want to say there is like 180 abandoned uranium mines that are within this program. It received a good slug of funding about 5 years ago when these IDIQ bids came out. We were awarded that – awarded a contract with our prime who is a Native American firm and local to the area in the Navajo region there in the Northeast, Arizona. And this is the first one. So, there is a contract that we have hired across, I believe it’s Tetra Tech that their job and has been highly funded and most of the funding has been, I think if anything, they actually spend all their funding, where they are going around doing the characterization and surveying and developing the scope for each one of those mines. As I mentioned before, I believe we have 12 or 18 done. And next step after Tetra does that as they turn over the information to the EPA, EPA puts together procurement between these three bidders, these three awardees and they go. So, we won the first one of those. And they are very remote locations, some more remote than others. And they will be off and running, hopefully start making awards subsequent to the first one through the summer. Some are very large, some are smaller. This is a smaller one. And – but we are hopeful that once we could go in, our systems will be in place and they can keep operating and once they are in the field, because mobilization is so expensive on these types of things. So, it’s very difficult to tell you what type of funding this year looks like because they…

And right now, these vessels are just sitting idle?

Look, it’s like the enterprise, my understanding, the enterprise is sitting at HII, I think the angles in Norfolk, and they are maintaining it. It has eight reactors on it. So, it’s a big job and a complex one to make it go away. So yes, it’s sitting in the harbor there or the shipyard there at Norfolk.

Nothing really wrong with that. You talked about the competitive environment. It looks like in a lot of places you are operating, you have a very limited number of competitors. And it would seem to me that one of the risks the government runs into in here is that it needs to make sure that it continues to have competitive options. So therefore, one would expect to see some spreading of business, it’s not yours. How do you see that environment? And is that not an incorrect read that given the limited number of people who can do what you are doing that, basically over time, everyone needs to win some?

I should like to think that, Ross, that not only government but even the primes have that same perspective. If one company gets all the work, it’s not going to be – you want a competitive market. And DOE certainly understands that. I think they consider that. I don’t know how they consider in these big proposal initiatives. But I do believe that’s the case and that everyone is sensitive to the comment you just made and understands the importance of spreading it around as well. So yes, I think that’s an objective.

So, in areas where perhaps the other side, the other group one, there might be some potential tilt to the idea of keeping your consortium and your team in the game, otherwise, you risk losing the capability entirely?

Yes. That’s – I just don’t understand how that’s going to all play out with this award because it is so large. And – but we certainly have a long-term mission in the Richmond area up there and a very unique capability that other folks don’t have. So I would expect, no matter what happens, I would expect to be a player on the waste treatment side of the house for the long-term with that contractor.

Yes. And just a quick comment, and obviously, you have mentioned some of the rail transport there. Obviously, everyone knows about what went on in Ohio, but I thought it was interesting. There is a lawsuit by a Native American nation against the Burlington Northern Santa Fe for an oil train derailment a number of years ago. I think it was back in 2015 that just after that trial started, Burlington Northern Santa Fe derailed another train on that nation’s property or land. So, I thought it does highlight the fact that any time you put anything on the train and haul it someplace, bad things can happen, which obviously increases the risk and the cost of the project. Otherwise, I think it sounds like from what you are saying that a lot of this – I noticed the tenses that you are using, a lot of the tenses you are using are not, what I might call, hopeful tenses, but expected tenses, that you see this happening. And you see this is really like the game that – it’s not the game might change. It’s the game has changed and is changing. And that those pieces are already moving, the rocks are already sliding. Is that a correct read?

Well, Ross, we got to be careful to as public companies to only speculate on these things. But the – so there is risk, obviously, we all know that going into this. But what Perma-Fix has tried to do for the last 7 years, truthfully, is to get as many big irons in the fire as we possibly can, with the hope that a couple of them we will win. And the one thing I am very confident about is the rod that came out that everyone has commented on is – could be viewed, to a large degree, as a commitment by DOE to ship us that waste. There is risk that plant has to get up and running and operate, but that’s a pretty big commitment they have made to commercialize through local capabilities, that secondary waste from DFLAW. 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.

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.

Thank you.

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

Good afternoon. How are you guys?

Good Stephen. Good afternoon.

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?

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.

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…?

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.

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. The infrastructure and its capabilities cannot be understated in its uniqueness and value. Since 2016, I have watched how Perma-Fix has moved to diversify in a multitude of areas beyond those at Hanford. Clearly, Perma-Fix is capable of being a $150 million plus company without Hanford, with treatment and service segments as it lends to a wide array of possibilities. Immediately when I started studying the Hanford reservation and particularly the vitrification plant being built, I frankly was a guest. Over 30 years, not 1 gallon had been treated from the 56 million gallons of mixed nuclear waste sitting in the 170 tanks. In 2022, there was $1.5 billion spent on maintaining the waste in the tank and building the deep well plant to treat low-level waste. I immediately understood that 90% of the waste in the tank was low radioactive waste and more suitable for treatment by immobilizing and then solidifying with…

Stephen, this is Mark. I think we are going to probably have to wrap up, do you have – can you conclude on that, Steve, before we move forward?

Excuse me?

We need to move on, I am afraid. Are you close to the end, or can you have a conclusion that you can wrap up?

I have two more paragraphs.

Okay.

Finally, there has been a tank maintenance contract for the tank farm sitting out there for award. It is for 10 years and $45 billion. Perma-Fix is part of the two consortiums bidding. If Perma-Fix consortium wins, Perma-Fix would have people on the ground at the tank form, irrespective any treatment at their Northwest plant. The contract encompasses maintaining the tank’s waste to running the vitrification plant. In any case, Perma-Fix will treat waste. That is the given. And of course, it will be a significant impact to the financials of Perma-Fix. Over the last year, I have commented at the DOE, a college in interior Washington State, had comments by court order included in the files of the Consent Decree. And my comments are publicly included in the National Academy study in a low-level waste in Hanford. In this vein, I urge you to speak to your congressional representatives in order to start treating waste at the Hanford tank farm. There is no reason that Perma-Fix should not be treating waste right now. I am done.

Alright. Thanks. We appreciate your passion on this topic, Stephen, and your support. I do have to say that statements that were made by Stephen were Stephen alone and don’t necessarily reflect all the views and opinions of PESI as a company. But we appreciate your support, Stephen.

Thank you.

I would like to thank everyone for participating in the fourth quarter and year-end conference call. We remain extremely confident in the outlook for the business. We appreciate the continued support of our shareholders and we look forward to providing further updates as developments unfold this quarter. Thank you very much.

Thank you everyone. This concludes today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.