Perma-Fix Environmental Services, Inc. (PESI) Q3 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to the Perma-Fix Fiscal Third Quarter 2026 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to turn the floor over to your host, David Waldman, Investor Relations. The floor is yours.

Thank you. Good morning, everyone, and welcome to Perma-Fix Environmental Services Third Quarter 2026 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 third quarter financial results, which is also posted on the company's website. If you have any questions after the call, 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 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 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 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 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. I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.

All right, David, thank you, and good morning, everyone. Thank you for joining us. Our third quarter results improved meaningfully from the first half of the year, and we continue to make significant progress on the objectives that we believe will carry Perma-Fix into the growth we've been planning for many years now. Revenue increased 39% from our second quarter to $17.9 million and consolidated gross profit returned to positive territory. Treatment backlog grew approximately 25% during the quarter to $19.6 million, which is up approximately 65% from the end of 2025. While our net loss reduced from the second quarter, we did not reach our goal of breaking even this quarter and several factors held us back. The largest was the Hanford-related waste stream that we received through the second and third quarters. The customer directed changes in the treatment protocols for that stream, which required performance testing and final approvals. Those approvals were not provided until late August and implementing the changes that we didn't reach full operations until September. As a result, revenue from the waste stream was pushed out of the quarter, and we expect to recognize it over the next few months. Second, we took scheduled downtime during the quarter to complete maintenance and upgrades on the thermal treatment systems at our Florida and Kingston, Tennessee facilities. That work was completed in September, and the systems are now supporting a large backlog of waste receipts we built over the summer. Third, receipts of liquid and solid waste shipments from DFLAW have been delayed, primarily due to the Hanford vitrification plants transition from construction and commissioning into operations. We've also made significant changes to the pricing structure in our Treatment segment. Over the past several years, our costs have risen, particularly for labor, technology upgrades and the replacement of equipment needed to support our safety and performance goals at each facility. We began implementing price increases in August. The increases on our commercial and our government waste streams began taking effect late in the third quarter with complete deployment in October. We expect these increases to favorably impact our Treatment segment revenue and margins. The new prices -- new pricing is beginning to be reflected in our new backlog, and we're encouraged that our customers have been supportive of the changes, which allow us to continue providing the level of service and performance they expect. Turning to Hanford. Perma-Fix Northwest has been receiving liquid effluent from DFLAW facility since the start of the third quarter, and we're grouting that effluent today. We've also begun receiving smaller quantities of dry waste from DFLAW operations. We expect both streams to increase as DFLAW ramps up to higher production levels in the coming months, and we expect dry waste receipts to grow further as operations of the plant transitions from the construction contractor to the operations contractor in the fourth quarter and into the first quarter next year. Total DFLAW effluent volumes are still not known with precision as the plant continues to increase production to approximately 20% by the end of '26, but we expect our receipts to increase roughly in line with DFLAW production levels throughout the next year. We view this as a long-term role for Perma-Fix Northwest. DOE's 2023 amended Record of Decision identified Perma-Fix Northwest to treat effluent waste from DFLAW operations estimated at approximately 8,300 cubic meters a year on an interim basis expected to last approximately 10 years. In August, H2C awarded us 1 of 3 Master IDIQ subcontracts for the treatment and disposal of pre-liquid mixed waste -- low-level waste from the Hanford site. Task orders may be received from January 1 of '27 through December 31, 2041. The procurement provides for maximum cumulative quality -- quantity of 50 million gallons and a maximum cumulative value of approximately $4.4 billion, which our ceilings shared among the 3 subcontract holders. We anticipate receiving initial task order requests beginning this quarter to support the ongoing grouting of DFLAW effluent at our Perma-Fix Northwest facility. One of the 3 subcontract holders, Perma-Fix Northwest is the only one with a permitted facility located adjacent to the Hanford site, which allows us to grout and stabilize the waste in Richland and ship it as a solid by rail to a licensed disposal facility outside of Washington. The other 2 subcontract holders would need to ship the waste as a liquid and smaller loads over highways for treatment of their waste at their own disposal sites. We continue to invest in Perma-Fix Northwest during this quarter, including the purchase of an additional mixer and supporting equipment to increase reliability and production levels for the grouting -- for the growing DFLAW volumes and our other routing initiatives. We expect that system to be installed and operable by the first quarter of 2027. This upgrade is in addition to the purchase of 2 larger mixers that have been ordered, which will increase our total capacity for grouting to over 10 million gallons per year. Both upgrades must be supported by permit modifications, which are currently underway with the Washington State Department of Ecology. We also want to update you on the East area. In August, DOE submitted Class II and Class III permit mods requesting -- requested to the Washington State Department of Ecology tied to its plan to grout pretreated tank waste from the AP-106 tank, which included a 60-day public comment period. On October 8, Ecology sent DOE letters requesting additional information ecology needs from DOE to continue its review. Letters like these are typical when state regulators review permit modification requests and Ecology said it remains committed to working with DOE to advance our cleanup progress. The letters relate to DOE's request for the AP-106 waste and do not address the DFLAW waste streams we're receiving today or our own permit modification to expand grouting capacity at Perma-Fix Northwest. DOE has not formally changed its prior schedule for East area shipments beginning in the fourth quarter of this year, but we believe the time needed to respond to Ecology could delay initial receipts by several months. While DOE works through the permitting needed to begin grouting 200 East area tank waste, it continues to move its grout plus -- its Glass-Plus-Grout strategy forward. On October 30, DOE announced that it broke ground on the Advanced Modular Pretreatment System or AMPS at Hanford. According to DOE, AMPS will be able to pretreat 3.6 million gallons of tank waste a year, 3x the capacity of today's systems. That's before the waste esterified either at DFLAW or to be grouted. The H2C Master IDIQ contract -- subcontracts cover the treatment and disposal of this type of pretreated waste and DOE projects that the Glass-Plus-Grout strategy will complete the 200 East low-activity waste mission 12 years sooner by 2039 instead of 2051, saving taxpayers about $12 billion. And DOE stated in public meetings that the AMPS is scheduled to be online in early 2028. Our strategy at Perma-Fix Northwest is to have permanent capacity in place to meet the total needs of DOE's Hanford grouting and DFLAW programs, which we believe offers the most economical and safest solution with the lowest environmental risk to the community. The 200 West area is the largest and longer-term opportunity. DOE's October 2025 amended Record of Decision covers approximately 32 million gallons of West area tank waste from 22 tanks to be retrieved and grouted by 2040. And DOE has notified Ecology that near-term approach for that waste is to use off-site commercial treatment. Our Master IDIQ subcontract positions us to complete -- compete for that work under the task order request. To serve it, Perma-Fix Northwest continues to work with Ecology to expand our grouting permit capacity of 1.2 million gallons a year to levels that would support DOE's objectives for both the East and West tank farms. We're advancing the final design and procurement of the facility upgrades needed for that expansion capacity, which we currently expect to be complete in 2027 or late '27, subject to regulatory approvals. Turning to Nuclear Services. Revenue grew 46% year-over-year to $6.3 million, driven by projects awarded since the beginning of the year, including the approximately $24 million Master tax agreement with Lawrence Livermore National Laboratory that we announced in the first quarter. Services gross margins improved to 12.2% from 6.7% and the segment generated operating income of approximately $200,000 compared to an operating loss of approximately $460,000 in the third quarter of last year. Monthly services revenue continued to grow through a steady flow of smaller awards during the quarter, which is keeping our staff highly utilized and supporting a stronger backlog that extends through the second quarter of 2027. Customer-related delays pushed mobilization of our Los Alamos project to later in September, and we have since begun operations in the field at that project. Our other projects are performing to expectations. Much of our services work is ongoing now also involves waste retrieval, which generates materials for our treatment facilities. On PFAS, the third quarter brought an increase in sales and receipts compared with the first half of the year, including several wins for airport fire suppression system change-outs. States are also becoming more definitive on regulations. Florida is one of several states that have enacted legislation phasing out PFAS containing firefighting foams subject to specified expectations with phase outs over the next 3 years and civil penalties for non-compliance. These state requirements are expected to accelerate demand for PFAS destruction in the coming several quarters. Our Gen 2.0 system is primarily completed and is beginning commissioning this quarter, and we expect it to be fully operational in the first half of 2027. Once deployed, we expect it to triple our PFAS processing capacity. With that, I'll turn the call over to Ben to take you through the financials in detail. Ben?

Thank you, Mark, and good morning, everyone. For the third quarter of '26, we reported revenue of $17.9 million compared with approximately $17.5 million in the third quarter of '25, so an increase of $494,000. We reported a net loss of $3.5 million compared to a net loss of $1.8 million in the prior year quarter. Both basic and diluted loss per share were $0.16 compared with a loss of $0.10 in the third quarter last year. EBITDA from continuing operations, as we defined in this morning's press release, was a loss of $3.1 million compared with a loss of $1.5 million in the prior year quarter. The decline in profitability was primarily attributable to lower gross profit within our Treatment segment, partially offset by improved performance from our Service segment and slightly lower SG&A costs. Within our Treatment segment, revenue declined approximately $1.5 million compared with the third quarter of '25, primarily reflecting the lower processing volumes and a less favorable mix of waste processed. The largest impact was the result of the reduced processing of certain waste streams due to the customer-directed delays awaiting the approval of revised treatment protocols, which were not received until late August. So processing of waste did not reach full operations until September. Equipment downtime also impacted throughput and revenue during the quarter. These factors were partially offset by increased receipts and processing activity associated with other waste streams. Despite the lower revenue, new waste receipts remained relatively strong. Waste receipts in the quarter totaled approximately $15.1 million compared with $14.6 million last year, resulting in an ending treatment backlog of approximately $19.6 million at quarter end. Turning to profitability. The Treatment segment's gross profit declined approximately $2.5 million compared with the third quarter of '25. Approximately $1 million of this decline was attributable to the lower revenue, while approximately $360,000 resulted in less favorable waste mix with variable costs accounting for approximately 34.5% of revenue. In addition, fixed facility costs increased approximately $1 million -- $1.1 million compared with prior year's quarter, primarily reflecting the higher staffing levels and associated payroll and benefit costs as well as increased depreciation, maintenance and other operating expenses. This combination of reduced processing revenue, unfavorable waste mix and higher plant fixed costs significantly impacted Treatment segment's gross margins in the quarter. Turning to our Services segment, revenue increased approximately $2 million to $6.3 million compared with $4.3 million in the third quarter of '25, representing growth of approximately 46%. The increase was primarily driven by revenue from new and expanded project activity. These contributions more than offset revenue from projects that were completed or had reduced activity in the prior year. Services segment gross profit improved by $486,000 compared with third quarter last year. Approximately $405,000 of that improvement is attributable to higher revenue and while approximately $202,000 reflected overall improved project margins. These favorable factors were partially offset by higher indirect costs of approximately $120,000, including labor and direct charges. Overall, the Services segment gross profit improved to approximately 12.6% compared with approximately 7% in the prior year quarter. Turning to our SG&A. Our SG&A expenses totaled approximately $4 million for the third quarter, a decrease of approximately $85,000 compared to prior year. Marketing expenses declined approximately $260,000, primarily reflecting lower bid and proposal costs and reduced travel-related expenses. These savings were partially offset by approximately $174,000 in higher admin expenses from higher legal fees, director stock options, bad debt expense and travel. Turning to our balance sheet. We ended September with a cash of approximately $14.7 million compared with $11.8 million at the end of December 2025. Our working capital was approximately $11.4 million at quarter end compared with $13.8 million at year-end. Deferred revenue increased approximately $3 million from year-end. Our Treatment segment backlog reached $19.6 million at September 30 compared with $15.4 million at September 30 of '25 and $11.9 million at year-end of '25. Total debt at quarter end was approximately $1.9 million, excluding debt issuance costs with only $1 million due to PNC, our primary lender. And turning to cash flow for the 9 months ended September, our cash used by continuing operations was $10.8 million, primarily reflecting operating losses and working capital requirements. Cash used by investing activities from continuing operations was $6 million, including approximately $5.7 million in capital expenditures and advances on capital assets, together with approximately $381,000 for permits and other intangible assets. Capital expenditures were primarily directed towards our treatment infrastructure and strategic growth initiatives, including investments intended to expand our processing capabilities and to complete our next-gen PFAS treatment reactor. Cash from financing activities provided approximately $20.4 million of cash, primarily reflecting the $21.1 million in net proceeds from our May 2026 equity offering and approximately $164,000 from stock option exercise. These proceeds were partially offset by approximately $820,000 in scheduled debt and finance lease payments. In closing, our balance sheet remains strong -- our balance sheet remains supported by the proceeds of our May equity and the treatment backlog increased significantly compared with prior year, providing improved visibility into our future processing activity. With that, I'll turn the call over to the operator for questions.

[Operator Instructions] Our first question comes from the line of Aaron Spychalla from Craig-Hallum.

First for us, can you just provide some additional detail on DFLAW effluent waste volumes? It sounds like everything has started between kind of the liquid and the dry, and you're expecting a good ramp there especially as the contractor changes over.

Yes, Aaron, we are increasingly encouraged by DFLAW and the progress they're making and the optimism around the project regarding its ramp-up in production. As you know, we started receiving DFLAW effluent in July, and that's what we call EMF wastes from the blowdown from stack emissions. And that's been becoming steady through the quarter. However, it is -- it did see some significant increases, and I'll talk about those in a second. But the waste that we're starting to get from the slowdown is about 16,000 gallons a month as was the projection through Q3. And what we've seen is that these waste have significantly increased beginning in October. It's increased in radioactivity concentration levels, which also directly increases our cost to process it and dispose of it as well as our revenues. And right now, these are projected to double to 16,000 gallons a month from 8,000 gallons a month and have been moving at that level since October, which just kind of give you a sense is equivalent to about $17 million or $18 million in revenues a year if it was flat. However, the EMF waste are not expected to be flat as well as the solid waste, which are expected to increase proportionately with the production levels at DFLAW, and those are expected to increase each quarter. We've been informed by the management there that EMF could be as much as 40,000 gallons a month from DFLAW as it approaches full capacity, which would be about double the receipts that we're seeing right now overall. And DOE will be using the new IDIQ for contracting this waste here beginning on the first of the year. So we're expecting the first task order from the IDIQ to support EMF here in the next couple of weeks. There was an important press release out this week from DOE that may have been internal to the industry, but it was a published note that as far as production levels at DFLAW. They are projecting to not reach the goal, which was 500,000 gallons this year, but they're going to be in the 300,000 to 400,000 gallon range overall, which is about 20% of capacity. But the way things are going, they are projecting to meet 1 million gallons capacity in '27 and 2 million gallons in '28. So they still are increasing in production, and they feel like they're on track to meet their critical milestone that's in the third-party agreement or I should say the consent decree, which is to get to full capacity in '28. And they continue to optimize their systems, trying to get both melters working at the same time, and it seems like they're making pretty good progress on that. Now in regards to the dry waste, the current commissioning and construction contractor, which is Bechtel, has begun to work with us and along with the H2C contractor, which is taking over from Bechtel as the operations contractor. And those relationships are going very well as communications are significantly increasing. We've started receiving some filters from the DFLAW facility along with some equipment that's been contaminated and will be part of this maintenance program. We've also sort of received some spreadsheets about the current storage inventories so we can be prepared for the other waste that are coming. So we expect the pick-up -- these deliveries to pick-up in the next several months. And keeping in mind that most of this waste needs to be shipped 1 year after it's generated. So remember, it started operating in October of last year. So there'll be more and more requirements to start to make sure the waste is offsite before it gets to be aged, that we call it after 1 year. But while we still don't know what the exact volume projections look like overall, we are seeing these estimates increase. We're seeing that the original estimates we provided, which were 70 million a year at total production, that will be somewhere between 35 million and 70 million, at least from what we're seeing right now with the EMF getting us pretty close to that with that one single waste stream. But we still don't have a really solid understanding of what the dry waste looks like overall and how that will increase with production.

Understood. I mean just maybe a little more detail. So it sounds like on the -- why some of the DFLAW delayed shipments during this ramp, but it does seem like the dry waste has started, and there's kind of the requirement to get that treated within the time frame that those were generated, I guess, the year that you kind of talked about. Can you just kind of maybe give a little more detail?

Yes. We talked a lot of investors about this at stating, we don't understand why we're not getting the dry waste that we expected to. And the reason is because Bechtel is operating the facility, as I mentioned, as a commissioning program. And they have not -- I assume by scope, have not implemented a comprehensive waste management program. So we get -- we don't have a contract with Bechtel we have a contract with H2C who is beginning to take over. So now that they're involved in transition, it's been highly publicized in the local area that transition is underway through April. They're implementing a comprehensive waste management program, and they'll be working with us on all the administrative portions of that, which are what we call profiling and shipping and coordinating shipments and making sure we have the capacity to receive everything when they want to ship it. And that will start picking up pace really, we expect in Q1. But the transition process is ongoing now. So we're starting to see a lot more communication. We have great relationships with H2C. It's been going very good on what we call the ETF waste, which is the waste I mentioned that was delayed in the protocol. That's all rolling now. And we're implementing, as I mentioned, a new grouting system right now to make sure we can handle all that waste as well as the East side when AP-106 starts flowing here and working with H2C to make sure that everything is in order so that waste can start flowing when it starts moving. So it's really -- to answer your question, really more of an issue of that transition from Bechtel in construction to H2C as the operator.

Okay. Great. And then just maybe one on East grouting. Can you kind of talk about the latest thoughts on getting approval there from Ecology, especially as DFLAW has kind of begun to ramp and just what that contribution could look like for you as that gets going in 2027?

Yes. The East side has a lot of momentum from DOE headquarters and from the site itself. We continue to see the leadership from DOE headquarters, particularly Assistant Secretary and the COO and staff continue to discuss the Glass-Plus-Grout approach and how important it is to them for a number of different reasons. And one of them just recently in a presentation to the Oregon regulators, I think it was last week, it was on YouTube that they reviewed the fact that they need to have some additional tank space so they can move leaking tanks into the double-shell tanks. And they can do this through acceleration of the grouting program, which is the Glass-Plus-Grout program. And as I mentioned, some letters were written on October 8 that highlighted the or address the permit request for the East Side, which is a Class II and Class III mod, which closed its public comment period in mid-April -- mid-October, excuse me. And those letters were called incompleteness letters. And when you first read them, you're taking them back and saying, oh my gosh, this is a lot. But these letters are pretty normal. We've gotten them before too. Other people have with the permit request, mod request. And what the Ecology is doing is trying to make sure they have all the information they need to do their evaluation. And it was a pretty long list. It gives us a little pause in thinking that this is -- the current schedule for East side was fourth quarter to start shipping. And I think we estimated or do you estimate it was going to be about 60,000 gallons a month. We do see that delaying a little bit. DOE has not formally said anywhere that there is a delay. So it's our speculation based on the amount of information has to provide that could have a few to several months of delay to get those documents in to support Ecology's review. And that's kind of where we see the East side going. It's still a huge priority on both sides to get that in place. And as I mentioned, there's pretty dramatic cost savings associated with the overall program faster and get that in place. And as I mentioned in the notes, the AMPS system is on track for 2028. So everything else needs to be in track with and DOE is still on that priority to make that happen as soon as possible. So hopefully, we'll start to see something in the next quarter or 2, and we'll get a good understanding of what the new schedule is going to look like for receipt of the East Side routing.

Great. And then just maybe one last one for us. Can you just talk about any impact to kind of programs or expectations you see maybe coming from the recent election and things there?

Yes. I mean that's a tough question. It's only been a couple of days. But just kind of thinking through it and talking to some consultants we have in D.C. in anticipation of that question. We have pretty high certainty based on what happened that an appropriations bill will not likely be signed for the budget, which means we'll probably have a CR, at least through this year and maybe even next year. And the CR typically has an impact on us regarding waste receipts. However, there's a few drivers now that are different in the last 2 years that I think will temper that impact and maybe make a CR less of an obstruction for shipping waste. First off, the Hanford goals at IDIQ remain very clear and it's very clear that the grouting at Hanford is a huge priority for the whole administration, particularly the EM shop, getting the Glass-Plus-Grout strategy rolling. So as far as priorities go, it's still very high. I think this is -- the overall EM program is also really getting bolstered through a significant number of nuclear firms that are committing to develop capacity and capability for energy development as well as data centers on DOE EM sites, Hanford being one of them. We all know about Oak Ridge and Fort Lauderdale pretty much every DOE site has some type of initiative. And we had a conference last week in Knoxville and the System Secretary talked about the $650 billion in commitments from these industries for SMRs and for fuel production and all types of other ancillary components for energy as well as the data center standups at DOE sites. So those are kind of driving EM program to make sure they're moving forward with cleanup. Again, the $650 billion is private commitments. It's not from treasury. However, cleaning up the sites is part of the whole initiative. And we continue to see that emphasis within the DOE EM program. And that puts a lot of pressure on making sure they meet their goals as these new tenants, so to speak, come into the area and start making large construction investments at this point. So that's another key component to why I see stability on the EM program overall. And then secondly, because of the budget cuts over the last couple of years, each of the DOE sites, primary sites are seeing some carryover. In other words, money that wasn't spent from those cuts. And I know particularly Hanford, the carryover there that will also provide some stability and address the issues associated with flat budget scenarios that come with the CR. So I don't see any impact at all at Hanford, limited impact from the other sites. There may be a few here and there with the CR. We're also optimistic that maybe lastly that the new Congress will have a little more emphasis on PFAS. As I mentioned in the notes, we're starting to see some states really make some very definitive decisions on regulations and the requirements for change out of PFAS fire suppression systems with 3-year mandates on making sure everyone's got their PFAS system foam switched out with the non-PFAS foam within the next 3 years. So I think that's going to drive the PFAS program forward. With Congress the way it is now, I think there'll be more emphasis to make sure that the rules are promulgated in 2 years from now through the EPA. And once that happens, this program will really take off and destruction of PFAS contaminants will be front and center in the environmental industry, and our systems will be proven and up and running to handle very large volumes. So I think it's kind of a general summary overall. Again, I don't see a lot of immediate impact. I will say this, too, one last thing is that the congresswoman for the Tri-City area in Richland, as she was running made several comments along the way relative to her support to new technologies and to accelerate and foreclosure, which has not always been the case with some of the existing congressional delegations up there, not necessarily on the House side, but on the Senate side, where they want to stick with the current program. I think Amanda McKinney, who's the newly elected congresswoman there, has stated several times that she is very open to acceleration in supportive. So hopefully, we'll be able to get some time with her and build that relationship in regards to grouting the other technologies we're bringing to the table.

Our next question comes from the line of Edward Leh from Goldman Sachs.

My question is, business seemed to improve a lot in the third quarter coming into the fourth quarter, but you continue to mention in your press release ongoing concern. So reading between the lines, does that mean you're thinking of another equity offering after you just did one in May? So any thoughts I'd like to appreciate it.

Well, maybe I'll start with that and let Ben touch base on it, Edward. I think we are not right at this point in time, considering the need for an equity raise of any kind. We feel like with the increase in performance that the company is getting stronger, and we can see free cash flow in the future. We are -- our investments are going to be slowing down initially. We do have some more associated with Hanford to get to that $10 million calendar year goal that we have. But PFAS is slowing down initially, at least in the near term as far as investment dollars and with the increase in our performance to a profitable position here in the next few quarters, we don't see that need arising. Ben, anything you want to add to that?

Yes, I can touch on the going concern, Edward. The accounting standards are pretty rigid as far as going concern goes. And unfortunately, what we're dealing with is past quarter history and our -- and the delays that we have to deal with our major customers that have kind of not helped us when we project future earnings. So we're getting a pretty -- we're holding ourselves to a pretty strict standard on being able to project forward and with the lack of visibility, which is improving, as you've heard in the last couple of calls, we feel comfortable that we won't be subjected to sort of 4x our last losses would make us run out of money. So that's a kind of long way to say, I think we're going to come out of this going concern. It's a very rigid accounting standard that we have to hold ourselves to. And as Mark said, we're still very optimistic that our operations will fund future operations.

Okay. That's helpful. If you ever decide to do another equity offering, I would suggest doing a rights offering so as not to dilute existing shareholders. That's just my two cents. Thank you, both.

Very good. Thank you.

There are no further questions at this time. I will now turn it back to management team for closing remarks.

All right. Thank you all for your questions, and thank you for joining us this morning. The third quarter was a clear step forward from the first half of the year. The delayed Hanford ETF waste stream has reached full treatment operations now in September. The thermal treatment upgrades at Florida and Kingston, Tennessee are complete, and our new pricing is taking effect. We ended the fourth quarter with treatment backlog at $19.6 million, up approximately 65% from the year-end, along with the DFLAW receipts that we expect to grow in the services business that is generating operating income. Our position in Hanford also continues to build. DOE has identified Perma-Fix Northwest to treat most of the secondary waste from DFLAW. We hold 1 of the 3 Master IDIQ subcontracts for Hanford tank waste, and we're investing to expand our capacity for the 200 West area program as well. DOE has said that by 2030, their goal is to treat or to grout more than 9 million gallons of tank waste a year to be shipped out of state for disposal, and we're building the capacity to compete for that work. We believe these developments position us for improved operating results in the coming year, and we look forward to updating you on our progress. Thank you.

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.