What changed in this filing

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Item 1. Business

2024-03-13 compared with 2023-03-23 · 135 added, 130 removed, 202 unchanged (57% of the section changed)

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Within our Services

Segment, we continue to bid on projects, increase competitive procurement effectiveness and broaden the market penetration within both

the commercial and government sectors.

The Company continues to remain focused on expansion into both commercial and international markets

to supplement government spending in the United States of America (“USA”), from which a significant portion of the Company’s

revenue is derived.

This includes new services, new customers and increased market share in our current markets.

and Other Impacts

2022 financial results continued to be impacted by COVID-19, among other things.

Our Treatment Segment began to see steady improvements

in waste receipts starting in the second quarter of 2022 from certain customers who had previously delayed waste shipments due, in part,

from the impact of COVID-19.

This positive trend was negatively impacted by occurrences of severe weather conditions which resulted in

temporary delays in waste shipments from certain customers and a temporary shortage in skilled production personnel which peaked through

the fourth quarter of 2022 at one of our facilities.

In early part of 2022, our Services Segment continued to experience delays/curtailments

in project work by certain customers since the award of projects to us late in the second quarter of 2021 due to COVID-19 impact and/or

administrative delays.

However, starting in the second quarter of 2022, work under these projects had resumed/increased as the pandemic

impacts began to subside and has since reached full operational status.

In 2022, we continued to realize delays in procurement and planning

on behalf of our government clients that saw easing through the second half of the year.

Heading into 2023, we expect to see continued

improvements in waste receipts and continued increases in project work from contracts recently won and bids submitted in both segments

that are awaiting awards, subject to potential COVID-19 and economic impacts.

(See “Item 7.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations – COVID-19 and Other Impact” for a full discussion of COVID-19 and other

impacts on the Company’s results of operations).

Segment, we continue to increase competitive procurement effectiveness and broaden the market penetration within both the commercial

and government sectors.

We continue to increase our focus on expansion into both commercial and international markets (see “Foreign

Revenue and Initiatives” below for further discussion of a recently won foreign contract) to supplement government spending in

the United States of America (“USA”), from which a significant portion of our revenue is derived.

This includes new services,

new customers and increased market share in our current markets.

experienced significant improvement in our 2023 financial results as the lingering effects of COVID-19 began to subside starting in the

early part of 2022.

Our Treatment Segment continued to see steady improvements in waste receipts from certain customers who had previously

delayed waste shipments due, in part, from the impact of COVID-19.

Within our Services Segment, certain projects which were delayed/curtailed

in the first part of 2022 due, in part, from the lingering effects of the COVID-19, achieved full operational status and improved productivity

in 2023 which positively impacted revenue.

Revenues from both of our Segments were also positively impacted from contracts won in 2023

as procurement and planning on behalf of our government clients continued to progress as the lingering effects of COVID-19 pandemic subsided.

into 2024, we expect to see overall continue steady improvements in waste receipts and increases in project work from certain

existing contracts, contracts won in 2023, and bids submitted in both segments that are awaiting awards.

However, due to our

operations which is subject to seasonal factor, we generally experience lower revenue in the first quarter due to overall reduced

activities by our customers from the usual slowdown in operations due, in part, from returning from the holiday periods and poorer

weather conditions.

Additionally, due to Congress’s inability to timely approve FY 2024 budget and the extension of the

continuing resolution, certain of our government related customers have informed us that waste shipments will likely be delayed.

Although we expect to see overall improvements in revenue in 2024 as disclosed above, if Congress is unable to enact the full FY

2024 appropriation bills or further extend the continuing resolutions to fund government spending by the late March deadline, the

government will enter into a partial shutdown.

The full impact of any additional continued resolution beyond March or a partial

government shutdown is uncertain.

If a partial government shutdown were to occur and were to continue an extended period,

our financial results of operations could be negatively impacted by delays in procurement actions, waste shipments and project

delays on newly awarded projects (See “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results

of Operations – for a full discussion of the Company’s results of operations for 2023).

Information and Foreign and Domestic Operations and Sales

2022, the Company has two reportable segments.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting

Standards Codification (“ASC”) 280, “Segment Reporting”, we define an operating segment as:

2023, we have two reportable segments.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards

Codification (“ASC”) 280, “Segment Reporting”, we define an operating segment as:

business activity from which we may earn revenue and incur expenses;

operating results are regularly reviewed by the chief operating decision maker “(CODM”)

to make decisions about resources to be allocated and assess its performance;

operating results are regularly reviewed by the chief operating decision maker “(CODM”) to make decisions about resources

to be allocated and assess its performance;

which discrete financial information is available.

SEGMENT reporting includes:

low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste),

hazardous and non-hazardous waste treatment, processing and disposal services primarily through

four uniquely licensed (Nuclear Regulatory Commission or state equivalent) and permitted

Environmental Protection Agency (“EPA”) or state equivalent) treatment

and storage facilities as follow:

low-level radioactive, mixed (waste containing both hazardous and low-level radioactive waste), hazardous and non-hazardous waste

treatment, processing and disposal services primarily through four uniquely licensed (Nuclear Regulatory Commission or state equivalent)

and permitted (U.S.

Environmental Protection Agency (“EPA”) or state equivalent) treatment and storage facilities as

Perma-Fix of Florida, Inc.

(“PFF”), Diversified

Scientific Services, Inc., (“DSSI”), Perma-Fix Northwest Richland, Inc.

and Oak Ridge Environmental Waste Operations Center (“EWOC”);

& Development (“R&D”) activities to identify, develop and implement innovative

waste processing techniques for problematic waste streams.

(“PFF”), Diversified Scientific Services, Inc., (“DSSI”), Perma-Fix Northwest

Richland, Inc.

(“PFNWR”) and Oak Ridge Environmental Waste Operations Center (“EWOC”);

& Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques for

problematic waste streams.

2023, the Treatment Segment accounted for $43,477,000, or 48.5%, of total revenue, as compared to $33,358,000, or 47.2%, of total revenue

See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our Segments’

contracts with government clients (domestic and foreign) or with others as a subcontractor to government clients.

contracts with government clients (domestic) or with others as a subcontractor to government clients.

SEGMENT, which includes:

services, which include:

○ professional

radiological measurement and site survey of large government and commercial installations

using advanced methods, technology and engineering;

physics services including health physicists, radiological engineers, nuclear engineers and

health physics technicians support to government and private radioactive materials licensees;

radiological measurement and site survey of large government and commercial installations using advanced methods, technology and

physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support to

government and private radioactive materials licensees;

Occupational Safety and Health services including industrial hygiene (“IH”) assessments;

hazardous materials surveys, e.g., exposure monitoring;

lead and asbestos management/abatement

hazardous materials surveys,

e.g., exposure monitoring;

lead and asbestos management/abatement oversight;

indoor air quality evaluations;

health risk and exposure assessments;

safety plan/program development, compliance auditing and training services;

and Occupational

Safety and Health Administration (“OSHA”) citation assistance;

technical services providing consulting, engineering (civil, nuclear, mechanical, chemical,

radiological and environmental), project management, waste management, environmental, and

decontamination and decommissioning (“D&D”) field, technical, and management

personnel and services to commercial and government customers;

health risk and exposure

health & safety plan/program development, compliance auditing and training services;

and Occupational Safety and

Health Administration (“OSHA”) citation assistance;

technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project

management, waste management, environmental, and decontamination and decommissioning (“D&D”) field, technical, and

management personnel and services to commercial and government customers;

management services to commercial and governmental customers.

- Nuclear services, which include:

of government and commercial facilities impacted with radioactive material and hazardous

constituents including engineering, technology applications, specialty services, logistics,

transportation, processing and disposal;

termination support of radioactive material licensed and federal facilities over the entire

cycle of the termination process:

project management, planning, characterization, waste stream

identification and delineation, remediation/demolition, final status survey, compliance demonstration,

reporting, transportation, disposal and emergency response.

company owned equipment calibration and maintenance laboratory that services, maintains,

calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental,

and occupational safety and health (“NEOSH”) instrumentation.

services, which include:

of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology

applications, specialty services, logistics, transportation, processing and disposal;

termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process:

management, planning, characterization, waste stream identification and delineation, remediation/demolition, final status survey,

compliance demonstration, reporting, transportation, disposal and emergency response.

company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health

physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.

2023, the Services Segment accounted for $46,258,000, or 51.5%, of total revenue, as compared to $37,241,000, or 52.8%, of total revenue

See “Dependence Upon a Single or Few Customers” for further details and a discussion as to our Segments’

contracts with government clients (domestic and foreign) or with others as a subcontractor to government clients.

Treatment and Services Segments provide services to research institutions, commercial companies, public utilities, and governmental agencies

(domestic and foreign), including the U.S.

contracts with government clients (domestic) or with others as a subcontractor to government clients.

Treatment and Services Segments provide services primarily to research institutions, commercial companies, public utilities, and governmental

entities, including the U.S.

Department of Energy (“DOE”) and U.S.

Department of Defense (“DOD”).

The distribution channels for our services are through direct sales to customers or via intermediaries.

The distribution

channels for our services are through direct sales to customers or via intermediaries.

corporate office is located at 8302 Dunwoody Place, Suite 250, Atlanta, Georgia 30350.

Revenue and Initiative

consolidated revenue for 2022 and 2021 included approximately $406,000, or 0.6%, and $9,277,000, or 12.9%, respectively, from Canadian

March 2022, we signed a joint venture term sheet addressing plans to partner with Springfields Fuels Limited (“SFL”), an

affiliate of Westinghouse Electric Company LLC, to develop and manage a nuclear waste-materials treatment facility (the “Facility”)

noted previously, we continue to increase our focus on expansion into international markets.

December 18, 2023, the joint venture (“JV”) where we and Campoverde Srl (“JV partner”) each owns 50% of the partnership,

was awarded a multi-year contract valued up to approximately EUR 50 million by the European Commission (the “Contracting Authority”)

for the treatment of radioactive waste from the Joint Research Center in Ispra, Italy.

Work under this JV has not started as of December

The scope of work to be performed in the initial phases of this contract will be performed predominately by our JV partner.

Revenue generated by us under the initial phases will be limited to project management support through 2025.

We expect to generate an

increase in revenue under this contract starting in 2026 when the waste treatment phases begin.

The Contracting Authority may terminate

the contract under certain conditions as set forth in the contract.

March 2022, we signed a non-binding joint venture term sheet addressing plans to partner with Springfields Fuels Limited (“SFL”),

an affiliate of Westinghouse Electric Company LLC, to develop and manage a nuclear waste-materials treatment facility (the “Facility”)

in the United Kingdom.

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The finalization, form and capitalization of this unpopulated partnership is

subject to numerous conditions, including but not limited to, winning a certain contract, completion and execution of a definitive agreement

and facility design, granting of required regulatory, lender or permitting approvals and updated cost and profitability analysis based

on current and forecast future economic conditions.

Upon finalization of this venture, we will be required to make an investment in this

The amount of our investment, the period of which it is to be made and the method of funding are to be determined.

subject to numerous conditions, including but not limited to, completion and execution of a definitive agreement and facility design,

granting of required regulatory, lender or permitting approvals and updated cost and profitability analysis based on current and forecast

future economic conditions.

Upon finalization of this venture, we will be required to make an investment in this venture.

of our investment, the period of which it is to be made and the method of funding are to be determined.

consolidated revenue for 2023 and 2022 included approximately $2,066,000, or 2.3%, and $1,226,000, or 1.7%, respectively, from foreign

Factors of our Business

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and financial condition.

The permits and licenses have terms ranging from one to ten years, and provided that we maintain a reasonable

The permits and licenses have terms ranging from one to ten years, and provide that we maintain a reasonable

level of compliance, renew with minimal effort, and cost.

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Distributor-Destruction license, biomedical, and a radioactive materials license issued by the State of Florida.

Co-regulated TSCA Polychlorinated

Biphenyl (“PCB”) wastes are also managed for PCB under EPA Approval.

located in Kingston, Tennessee, conducts mixed and low-level radioactive waste storage and treatment activities under RCRA Part B permits

and a radioactive materials license issued by the State of Tennessee Department of Environment and Conservation, Division of radiological

Co-regulated TSCA Polychlorinated Biphenyl (“PCB”) wastes are also managed for PCB destruction under EPA Approval.

Co-regulated TSCA PCB wastes are also managed for PCB destruction under EPA Approval.

located in Richland, Washington, operates a low-level radioactive waste processing facility as well as a mixed waste processing facility.

Radioactive material processing is authorized under radioactive materials licenses issued by the State of Washington and mixed waste

processing is additionally authorized under a RCRA Part B permit with TSCA authorization issued jointly by the State of Washington and

processing is additionally authorized under a RCRA Part B permit.

Co-regulated TSCA PCB wastes are also managed for PCB under EPA Approval.

located in Oak Ridge, Tennessee, operates a low-level radioactive waste material processing facility.

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of radiological health.

combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by the Company and its

subsidiaries comprising our Treatment Segment is very difficult to obtain for a single facility and make this Segment unique.

combination of RCRA Part B hazardous waste permits, TSCA authorizations, and radioactive material licenses held by us and our subsidiaries

comprising our Treatment Segment is very difficult to obtain for a single facility and make this Segment unique.

believe that the permitting and licensing requirements, and the cost to obtain such permits, are barriers to the entry of hazardous waste

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December 31, 2023, we employed approximately 297 employees, of whom 288 are full-time employees and 9 are part-time/temporary employees.

None of our employees are unionized.

None of our current employees are unionized.

Company entered into a Project Labor Agreement (“PLA”) dated June 21, 2023, with UA Plumbers & Steamfitters Local 598.

The goal of this partnership is to supply our PFNWR facility with the organized labor force needed to take on the challenges of providing

a supplement treatment alternative to include concrete-like grout for Hanford’s Low Activity Tank Waste if and when the DOE grants

a contract to PFNWR to treat the Low Activity Tank Waste.

This supplemental capability would support DOE’s glassifying process

provided by the Hanford Vitrification Plant for safe transport and disposal off-site.

Environmental,

Social and Governance (“ESG”)

2022, we continued to improve our ESG performance.

Our ESG subcommittee under our Corporate Governance and Nominating Committee continues

to provide guidance on ESG management.

Our executive team is responsible for the development of a strategic roadmap for ESG efforts with

support from management from key functional areas.

The key areas of focus under our ESG initiatives continue to be health and safety,

environmental performance, DEI (diversity, equality and inclusion), talent retention and development, corporate governance and climate-forward

service development that support our customers’ transition to low carbon economy.

Our executive team is involved in policy planning

and coordination of corporate-wide ESG efforts.

See our website at https://www.perma-fix.com/esg.aspx for some highlights of our

ESG initiatives as well as our policies under our ESG as we continue to improve our ESG initiatives.

The information on our website is

not part of, or incorporated by reference in this Form 10-K.

have a ESG subcommittee under our Corporate Governance and Nominating Committee to provide guidance on ESG management.

Our executive

team is responsible for the continuing development of our ESG strategic roadmap with support from management from key functional areas.

The key areas of focus under our ESG initiatives continue to be health and safety, environmental performance, DEI (diversity, equality

and inclusion), talent retention and development, corporate governance and climate-forward service development that support our customers’

transition to low carbon economy.

Our executive team is involved in policy planning and coordination of corporate-wide ESG efforts.

our website at https://www.perma-fix.com/esg.aspx for some highlights of our ESG initiatives

as well as our policies under our ESG as we continue to improve our ESG initiatives.

The information on our website is not part of, or

incorporated by reference in this Form 10-K.

Upon a Single or Few Customers

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governmental authorities.

Our Services Segment also had

significant relationships with the Canadian government authorities.

A significant amount of our revenues from our Treatment and Services

Segments are generated indirectly as subcontractors for others who are prime contractors to government authorities, particularly the

DOE and DOD, or directly as the prime contractor to government authorities.

The contracts that we are a party to with others as subcontractors

to the U.S federal government or directly with the U.S federal government generally provide that the government may terminate the contract

at any time for convenience at the government’s option.

The contracts/task order agreements (“TOA”) that we are a party

to with Canadian governmental authorities also generally provide that the government authorities may terminate the contracts/task order

agreements at any time for any reason for convenience.

Project work under TOAs with Canadian government authority has substantially been

A significant account receivable due to our Perma-Fix Canada, Inc.

(“PF Canada”) is subject to continuing negotiations.

See “Known Trends and Uncertainties – Perma-Fix Canada, Inc.

(“PF Canada”)” in Part II – Item 7 –

“Management’s Discussion and Analysis of financial Condition and Results of Operations” for additional discussion as

to a terminated Canadian TOA.

Our inability to continue under existing contracts that we have with U.S government authorities (directly

or indirectly as a subcontractor) or significant reductions in the level of governmental funding in any given year could have a material

adverse impact on our operations and financial condition.

performed services relating to waste generated by government clients (domestic and foreign (primarily Canadian)), either indirectly for

others as a subcontractor to government entities or directly as a prime contractor to government entities, representing approximately

$60,030,000, or 85.0%, of our total revenue during 2022, as compared to $60,812,000, or 84.2%, of our total revenue during 2021.

A significant amount of our revenues

from our Treatment and Services Segments are generated indirectly as subcontractors for others who are prime contractors to government

authorities, particularly the DOE and DOD, or directly as the prime contractor to government authorities.

The contracts that we are a

party to with others as subcontractors to the U.S federal government or directly with the U.S federal government generally provide that

the government may terminate the contract at any time for convenience at the government’s option.

Our inability to continue under

existing contracts that we have with U.S government authorities (directly or indirectly as a subcontractor) or significant reductions

in the level of governmental funding in any given year could have a material adverse impact on our operations and financial condition.

performed services relating to waste generated by government clients (domestic), either indirectly for others as a subcontractor to government

entities or directly as a prime contractor to government entities, representing approximately $70,642,000 or 78.7%, of our total revenue

during 2023, as compared to $59,658,000, or 84.5%, of our total revenue during 2022.

revenues are project/event based where the completion of one contract with a specific customer may be replaced by another contract with

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state regulators.

December 31, 2022, we had total accrued environmental remediation liabilities of $861,000, a decrease of $15,000 from the December 31,

of December 31, 2023, we had total accrued environmental remediation liabilities of $845,000, a decrease of $16,000 from the December

31, 2022, balance of $861,000.

The decrease represents payments for remediation projects.

At December 31, 2022, $112,000 of the total accrued

environmental liabilities was recorded as current.

As of December 31, 2023, $61,000 of the total

accrued environmental liabilities was recorded as current.

nature of our business exposes us to significant cost to comply with governmental environmental laws, rules and regulations and risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business