Perma-Fix Environmental Services Q2 2026 Earnings Report

Perma-Fix Environmental Services EPS Results

• Actual EPS: -$0.32
• Consensus EPS: -$0.31
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Perma-Fix Environmental Services Revenue Results

• Actual Revenue: $12.89 million
• Expected Revenue: $12.90 million
• Beat/Miss: Missed by -$10.00 thousand
• YoY Revenue Growth: N/A

Perma-Fix Environmental Services Announcement Details

• Quarter: Q2 2026
• Date: 8/12/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 12, 2026
• Conference Call Time: 4:30PM ET

Perma-Fix Environmental Services (NASDAQ:PESI) (NASDAQ: PESI) is a specialized provider of environmental and nuclear waste management solutions. The company offers a comprehensive suite of services, including treatment, recycling, processing, volume reduction and disposal of hazardous, radioactive and mixed wastes. Its capabilities span thermal, chemical and physical treatment technologies, supported by a network of licensed facilities designed to handle complex waste streams.

Founded in 1994 and headquartered in Atlanta, Georgia, Perma-Fix has grown both organically and through strategic acquisitions. In 2019, the company expanded its nuclear services footprint by acquiring the Nuclear Services segment of Nukem Technologies, enhancing its treatment capacity and broadening its service offerings. Today, Perma-Fix operates across North America and Europe, serving a diverse customer base that includes federal and state agencies, the U.S. Department of Energy, Department of Defense, commercial nuclear utilities and various industrial clients.

Perma-Fix’s core activities encompass hazardous waste remediation, radioactive waste solidification and packaging, decontamination services, site closure support and engineered solutions for remediation projects. The company also provides specialized services such as isotope recycling, catalytic deactivation of organic contaminants and on-site treatment systems. These offerings are backed by quality compliance programs and environmental, health and safety protocols tailored to meet stringent regulatory requirements.

Under the leadership of Chairman and Chief Executive Officer Richard W. Mazza, Perma-Fix continues to focus on expanding its technical capabilities and geographic reach. The company’s management team emphasizes innovation in waste treatment technologies and strategic partnerships to address evolving customer needs in the environmental services sector.

Perma-Fix Environmental Services Q2 2026 Earnings Call Transcript

Key Takeaways

• Second-quarter results missed expectations: Revenue fell to $12.9 million from $14.6 million year over year, while the net loss widened to $6.2 million from $2.7 million. Customer-directed treatment delays shifted revenue into the second half, while labor and operating costs were incurred in Q2.
• Hanford growth opportunity expanded: Perma-Fix was awarded a master subcontract under the approximately $4.4 billion H2C IDIQ for Hanford tank-waste grouting, although the ceiling is shared among subcontractors and does not represent committed revenue. Management highlighted the company’s proximity to Hanford, existing permits, and operating facility as competitive advantages.
• Management expects significant volume growth: DOE’s plan indicates potential grouting shipments of roughly 60,000 gallons per month beginning in late 2026 and approximately 130,000 gallons per month by 2028, with a broader goal of up to 9 million gallons annually by 2030. Perma-Fix is seeking to expand its Northwest facility’s permitted capacity from 1.2 million to more than 10 million gallons annually, targeted for completion around Q2–Q3 2027.
• Backlog and services trends improved: Treatment backlog increased 29% sequentially to $15.7 million, and Nuclear Services revenue rose 44% year over year to $4.6 million, with services backlog exceeding $17 million over the next 18 months. DFLAW waste receipts began in July and are expected to increase as the facility addresses operating issues.
• Liquidity strengthened, but execution and government dependence remain risks: The May equity offering generated approximately $21 million in net proceeds, leaving Perma-Fix with $20.5 million of cash and $2.1 million of debt, and its credit facility maturity was extended to 2030. However, the company disclosed a going-concern notice because forecasts depend on government-directed waste shipments and project activity, and the Hanford opportunity still requires task orders and regulatory approvals.

Presentation

[Operator]

Please note, this conference call is being recorded. I will now turn the conference over to your host, Mr. David Waldman with Crescendo Communications. Sir, the floor is yours.

[David Waldman, President and CEO at Crescendo Communications]

Thank you, Ollie. Good afternoon, everyone, and welcome to Perma-Fix Environmental Services second quarter 2026 conference call. On the call with us this afternoon 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 afternoon containing second quarter 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 would 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.

[David Waldman, President and CEO at Crescendo Communications]

All statements on this conference call, other than statements of historical fact, are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which could cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission, as well as this afternoon'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.

[David Waldman, President and CEO at Crescendo Communications]

I would now like to turn the call over to Mark Duff. Please go ahead, Mark.

[Mark Duff, President and CEO at Perma-Fix]

All right. Thanks, David, and good afternoon, everyone. Thank you for joining us. I want to start by being direct about the quarter. Our second quarter financial results were below expectations. Revenue was at $12.9 million, and we reported a net loss of $6.2 million. That is not the quarter we wanted to deliver, and I am going to walk you through exactly what happened and why. I also want to be clear about something. The second quarter delivered the operational milestones we have been working for years. Those milestones, not this quarter's results, are what will define where the company is headed. Yesterday, the Department of Energy's Hanford Tank Contractor, H2C, announced the award of the master IDIQ for tank waste operations and closure for grouting and disposal to support the tank retrieval and disposition mission at the site.

[Mark Duff, President and CEO at Perma-Fix]

This mission is one of the most important programs within DOE's Office of Environmental Management and reflects this administration's priority to accelerate the removal of risk associated with the 56 million gallons of waste stored in the tanks at Hanford. The contract carries a maximum value of approximately $4.4 billion, with task orders eligible to be issued from 2027 through 2041. To be clear, that is a ceiling shared among all subcontract holders, not an amount awarded or committed to Perma-Fix. The program is supported by the Tri-Party Agreement with the state and federal regulators to remediate 22 tanks from the 200 West Tank area during that period. In addition, the contract was modified during the RFP process to include other tank and liquid waste streams to provide a contract vehicle for the 200 East Tank area as a supplement to the DFLAW program.

[Mark Duff, President and CEO at Perma-Fix]

While this award is an IDIQ contract vehicle, it will be used by H2C to issue task orders for specific volumes of waste to be dispositioned within the defined periods. H2C also awarded master subcontracts to two other companies, both located out of state. Perma-Fix Northwest is the only facility of the three where these liquids can be grouted near the point of generation without long-haul transport of liquid tank waste. Our Perma-Fix Northwest facility, located about 1 mi from the Hanford site, will provide capacity to meet the goals for tank retrieval and liquid waste processing as the program grows to meet the DOE EM goals and objectives.

[Mark Duff, President and CEO at Perma-Fix]

We have been preparing for this program for some time, upgrading our facilities, procuring large-scale treatment equipment, expanding our workforce through hiring and training, and acquiring the rail line parcel that connects Perma-Fix Northwest to the Port of Benton Short Line Railroad for direct rail shipments of treated waste. Under the performance work statement for the contract, we are required to maintain the capability to treat and dispose of pre-treated tank waste at the rate of 100,800 gal per week over a seven-week period. When annualized, this level is well above our current permanent annual capacity, and that is why we are expanding our current permit that I will discuss in a moment, which is already underway, to support the task orders that will be eligible for it beginning in January. Let me turn to why we are confident about the second half and beyond.

[Mark Duff, President and CEO at Perma-Fix]

DOE has adopted what it calls the Hanford dual glass-plus-grout strategy. In DOE's own framing, grouting is a proven technology already approved under the Hanford Holistic Agreement, and the Savannah River Site has also treated 13 million gallons of tank waste inventory in the same way. DOE projects the approach will deliver up to 300% more throughput while reducing treatment and disposal costs from roughly $1,200 per gallon to under $50 per gallon, in contrast to vitrification costs. DOE has presented the dual path strategy to stakeholders specifying Perma-Fix Northwest as the grouting provider for the EMF secondary waste effluent stream, which is the material we're receiving today. The H2C contract awarded yesterday will likely be used as the contract vehicle for the EMF beginning in January when the contract becomes active. On volumes, I want to be precise because these numbers get quoted loosely.

[Mark Duff, President and CEO at Perma-Fix]

The glass-plus-grout approach includes acceleration of tank retrieval operations at 100,000 gal per month using the existing TSCR. In case you don't know, the TSCR is the Tank-Side Cesium Removal system, which is an ion exchange system which removes the radioactive component of cesium, most of it from the waste stream. That TSCR is a critical part to pulling the waste out of the tanks currently. By 2020-

[Operator]

Apologies, ladies and gentlemen, we appear to have lost our speaker's line. One moment please while he reconnects. I'm not entirely sure our speaker is aware that his line has dropped at the moment, so please bear with us.

[Mark Duff, President and CEO at Perma-Fix]

Hello, I think we're back on. Can you hear me?

[Operator]

We have. Yes, sir.

[Mark Duff, President and CEO at Perma-Fix]

Okay. I'm not sure. My apologies. I was not aware that I had dropped off. I'm not really sure where I left off.

[Ben Naccarato, EVP and CFO at Perma-Fix]

Mark, start at where you were discussing the TSCR.

[Mark Duff, President and CEO at Perma-Fix]

Okay. All right. So explained what the TSCR was, I assumed, which is the Tank-Side Cesium Removal system, which is currently capable of treating or pulling out and retrieving about 100,000 gal per month to be loaded into AP-106 tank. By 2028, the advanced modular pretreatment system, also known as AMPS, will be operational, reaching a total of 300,000 gal per month of pretreated tank waste to be shared between the grouting program and the DFLAW facility for treatment. The DFLAW storage tank, again, known as the AP-106, is currently in capacity at over 1 million gallons. So the stored pretreated waste can be available for grouting while leaving ample feed from DFLAW operations without a constraint. As inventories are reduced through treatment, the TSCR can replenish the AP-106 at about 100,000 gal per month through 2027.

[Mark Duff, President and CEO at Perma-Fix]

DOE estimates that roughly 60,000 gal per month will be available from the AP-106 tank for grouting, beginning as early as Q4 of 2026, increasing to approximately 130,000 gal per month by 2028. Here's the point I want to make here. At 60,000 gal a month, we are inside our existing permitted grouting capacity of 1.2 million gal per year. Perma-Fix continues to develop and design technology to expand our capabilities with the specific goal of ensuring that our Perma-Fix Northwest plant can accept and process the full volume of waste Hanford provides for grouting. Treated locally and shipped by rail for disposal, and in contrast to our competitors, which will be transporting liquid waste on public highways for treatment and disposal out of state.

[Mark Duff, President and CEO at Perma-Fix]

That expansion is what we need the West Area Tank program, which will support the West Area Tank program, which is a separate and substantially larger opportunity. Across both the east and west tank areas, DOE totals are targeted to reach 9 million gallons annually by 2030. 9 million gallons of pretreated waste to be grouted annually. Perma-Fix Northwest has submitted a permit modification request to the Washington State Department of Ecology, and is working with these regulators to expand our grouting permit from its existing annual capacity of 1.2 million gallons per year to the levels that meets DOE objectives for both the East Side and the West Side tanks. The facility is in final design and procurement for the upgrades needed to achieve that expanded capacity, which should be ready by the third quarter of 2027.

[Mark Duff, President and CEO at Perma-Fix]

One development worth noting, the H2C procurement decision moved forward through this process in regards and awarded for an offsite treatment path rather than construction of a new onsite facility, which was included as an alternative within the H2C RFP. Consistent with that, on June 29th, DOE notified the State of Washington Ecology that its near term selection for treating 200 West Area tank waste is offsite commercial treatment with transport by truck, rail, or both. This is a favorable development for a facility positioned as we are. Perma-Fix Northwest sits immediately adjacent to the Hanford Site. We're permitted today, we're operating today, and we're receiving Hanford tank waste today for grouting. There's no facility to design or build and no facility to commission. For DOE, that means a treatment path that is available now rather than years from now.

[Mark Duff, President and CEO at Perma-Fix]

The shortest possible transport of liquid waste and no government capital outlay to get there. We believe the combination is difficult to replicate. This is also a distinction worth drawing between grouting near Hanford and shipping this waste material out of state for treatment. Under our approach, the waste is solidified in Richland and only stabilized grout travels on public roads out of state. It leaves Washington as a solid in a form that cannot leak. The alternative is a long-haul transport of liquid tank waste across multiple states, a treatment facility in Texas or Utah. Oregon and regional stakeholders have publicly urged DOE to solidify this material before it leaves the Hanford region, and our facility is what makes that possible. It is also work performed by local building trades through our relationship with the local UA Local 598, which keeps skilled jobs and expertise in the Tri-Cities area.

[Mark Duff, President and CEO at Perma-Fix]

In addition to this critical announcement, in early July, subsequent to the quarter end, Perma-Fix began receiving liquid effluent waste from the DFLAW facility at Hanford. I do not want to get too lost in the numbers. It is a culmination of years of permitting capital investment and operational preparation. We built the capacity, we obtained the permits, and we staffed the plant in anticipation of this waste, and it is now starting to arrive. We have since begun receiving additional waste streams from DFLAW operations, including dry waste generated by the plant operations, which we are processing for disposal at the local Hanford site landfill. This is not one system, or one waste stream. It is a growing number of waste streams from a plant that is still ramping up.

[Mark Duff, President and CEO at Perma-Fix]

DOE forecasts throughput goals increase each month at DFLAW operations, and they are working through production issues and associated equipment modifications to reach their objectives for 1 million gallons per year through vitrification at DFLAW. Let me explain why the quarter looked the way it did. We received the Hanford-related waste streams we expected during the quarter. That part of our plan worked, and you can see that reflected in our backlog. Treatment-related backlog grew by 29% from $12.2 million in March 31st to $15.7 million at June 30th. What did not happen on schedule was treatment. Our customer directed changes to the treatment protocol for these waste streams to accommodate a change in disposal facilities. This delayed processing from the second quarter into the third quarter. These changes supported the receipt of the waste for solidification but did not support processing and subsequent revenue recognition.

[Mark Duff, President and CEO at Perma-Fix]

We already added the personnel and incurred the operating costs to handle these volumes, so the cost landed in our second quarter, while the associated revenue moved into the second half. That mismatch is the primary driver of the Q2 loss. Two other items contributed. First, several new services projects started later than anticipated. Secondly, we processed previously stored waste, lower margin inventory waste, which compressed our treatment margin during that quarter as well. That work is now substantially complete and it frees up capacity ahead of our anticipated tank waste receipts. On the delayed waste streams, we expect to begin processing shortly, and to be caught up by the end of the third quarter. When I say we are encouraged about the second half, here is what is in front of us. The delayed waste we already have on site moves through treatment in the third quarter.

[Mark Duff, President and CEO at Perma-Fix]

DFLAW-related receipts continue to build through the balance of the year. Task orders under the Master Subcontract become eligible in January of 2027. Turning to Nuclear Services, this segment is providing a second engine of growth for us, and it is doing something else that really matters. It adds stability while our treatment volumes ramp. Services revenue grew 44% year-over-year in the quarter to $4.6 million from $3.2 million. Following the approximately $24 million Lawrence Livermore Master Task Agreement announced in the first quarter, we have secured additional awards during the second quarter at multiple DOE sites, along with several commercial and international contracts. Together, these support services backlog are over $17 million over the next 18 months. There is a second benefit that is easy to miss as well. Much of this work is waste retrieval, and retrieval operations generate material that flows through our treatment plants.

[Mark Duff, President and CEO at Perma-Fix]

Services backlog is not just stability, it is also a feeder into our treatment segment. Last week, we announced a strategic partnership with Mirion Technologies under the Small Business Administration's Mentor-Protégé Program. The logic is straightforward. Cleanup missions across the DOE complex are getting larger and more technically demanding, with much more difficult challenges. Our treatment infrastructure, remediation capabilities, and project management, combined with Mirion's radiation detection technologies and measurement and instrumentation expertise, gives us a stronger position to compete for that work. It is a natural extension of where we have been heading, and it widens the range of work we can offer. Before I turn things over, a brief word about PFAS. Our PFAS platform continues to advance with completed treatment work for both commercial and government customers, and the installation of our second-generation treatment unit to expand capacity.

[Mark Duff, President and CEO at Perma-Fix]

Our permanent destruction of PFAS remains one of the clearest unmet needs in this market, and our technology continues to maintain delivery of total destruction with no emissions and a significant value over incineration. While we realized a slowdown in PFAS receipts through May, sales and processing revenues have begun to increase this summer, with several awards from regional airports and commercial generators to support a solid backlog through Q3, including nearly $8 million in future award opportunities within our current pipeline of bids. Finally, a word on capital. In May, we completed a public offering with net proceeds of approximately $21 million, and a portion of that funding will be funding the VFL upgrades as well as our grouting upgrades at Perma-Fix Northwest. That capital is going directly into the capacity we have been discussing this afternoon.

[Mark Duff, President and CEO at Perma-Fix]

With that, I will turn the call over to Ben to take you through the financials in detail. Ben?

[Ben Naccarato, EVP and CFO at Perma-Fix]

Thank you, Mark, and good afternoon, everyone. For the second quarter of 2026, we reported revenue of $12.9 million, compared with the second quarter of 2026, I am sorry, compared with $14.6 million in the second quarter of 2025. We reported a net loss of $6.2 million compared to a net loss of $2.7 million in the prior year. Both our basic and diluted loss per share was $0.32 compared to losses of $0.15 in the second quarter last year. Within our treatment segment, revenue declined approximately $3.1 million from prior year. The decrease primarily reflected the lower processing volumes across the segment, together with unfavorable waste mix, which resulted in higher treatment and other variable costs and lower gross profit.

[Ben Naccarato, EVP and CFO at Perma-Fix]

These operational factors, specifically a customer-directed hold on processing, as well as the focus on previous stored waste, were the primary drivers of the year-over-year decline in treatment segment revenue and profitability. Despite these short-term challenges, waste receipts continued to improve. New waste receipts increased by $4.1 million over the first quarter, and our treatment backlog ended the quarter at $15.7 million, compared to $13.1 million at the end of the second quarter last year. We believe these are important leading indicators and reflect customer demand and provide improved visibility into future processing activity. Our services segment generated revenue that was $1.4 million higher than prior year, driven by contributions from several new project awards. These gains were partially offset by the completion of certain projects that contributed revenue in the prior year.

[Ben Naccarato, EVP and CFO at Perma-Fix]

Gross profit in this segment also improved modestly year over year, reflecting the higher revenue, partially offset by increased labor and other indirect costs. Turning to our administrative expenses, SG&A decreased by approximately $379,000 compared with prior year's quarter, primarily reflecting lower marketing, BD and credit losses, partially offsetting higher legal costs. Turning to the balance sheet and cash flow, we ended the quarter with $20.5 million in cash compared to $11.8 million at year-end 2025, reflecting the successful equity offering completed in May. Working capital also improved to $18.4 million, while treatment backlogging increased, as mentioned earlier, to $15.7 million, strengthening both our liquidity and our visibility into future revenue. Our continuing operations year to date operating activity used $8.8 million of cash, primarily reflecting the operating losses and normal working capital requirements as we continue to build backlog and execute projects.

[Ben Naccarato, EVP and CFO at Perma-Fix]

We invested $2.9 million in capital expenditures and other investing activities, with approximately $2.7 directed towards strategic capital projects that support future growth and operational capabilities. Finally, our financing activities provided $20.9 million of cash, primarily from the May equity raise, which strengthened the balance sheet while allowing us to continue investing in key growth initiatives. We ended the quarter with a total debt of approximately $2.1 million, maintaining a conservative capital structure. Before I turn it over, let me address the going concern disclosure in our Form 10-Q, which we included to comply with accounting guidance and because the forecasts we use depend on waste shipments and on project activity directed by the U.S. government customers, which are not guaranteed.

[Ben Naccarato, EVP and CFO at Perma-Fix]

Nevertheless, we ended the quarter with $20.5 million in cash, approximately $2.1 million of total debt, and we expect existing liquidity, anticipated operating cash flows, and borrowing availability to be sufficient to fund our operations over the next 12 months. In addition, subsequent to the end of the quarter, we amended our credit agreement with PNC Bank to extend the maturity of the facility from May 2027 to May 2030, further strengthening our long-term relationship with our lender. With that, I'll now turn the call over to the operator for questions.

[Operator]

Thank you. Ladies and gentlemen, at this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Once again, that's star one for any questions or comments. Thank you. Our first question today is coming from Aaron Spychalla with Craig-Hallum. Your line is live.

[Aaron Spychalla, Analyst at Craig-Hallum]

Yeah, good afternoon, Mark and Ben. Thanks for taking the questions, and hi, Lou as well. First for us, can you talk about potential volumes for grouting as we look later this year, more so into 2027? The RFP kind of talked about some task orders starting in 2027, and obviously it sounds like there's some excess capacity on the east side to be able to handle some grouting. So just if you could elaborate on that'd be great.

[Mark Duff, President and CEO at Perma-Fix]

Sure. Thanks, Aaron. Let me see if I can get into some details here. Again, I think everyone understands that DOE hasn't formally awarded any task orders yet, but we're in an interesting situation. DOE has held several stakeholder meetings recently, including one with the state of Oregon back in June and one today with the Hanford Advisory Board in Richland. Both of those can be found on YouTube. In this presentation, along with this other presentation along the way, DOE has presented a graphic that is quite clear. This graphic defines their near-term plan to ship waste from the 200 East Area tank program directly to Perma-Fix Northwest by name. Again, this graphic is part of the dual glass-plus-grout strategy overall, so it's what has been written up in several press releases and op-eds and letters from the Assistant Secretary, Tim Walsh.

[Mark Duff, President and CEO at Perma-Fix]

It includes on this graphic a depiction of AP-106 tank, which is the storage tank again, and shows that they'll be shipping waste for grouting from that tank to Perma-Fix Northwest, and then will also be shipping waste from the EMF facility to Perma-Fix Northwest, which they're obviously doing now. Within that graphic, it also has some anticipated volumes. Coming out of the TSCR or coming from AP-106, which again, as I said before, will be replenished by the TSCR. They're anticipating that they'll be able to ship 60,000 gal per month, beginning in 2026, which we'd anticipate to be late in 2026, and to maintain that 60,000 gal a month for grouting through 2027. So roughly, what is that? 720,000 gal in 2027, assuming they start right in the beginning of the month of January.

[Mark Duff, President and CEO at Perma-Fix]

That also is important to understand, depends on how much of AP-106 tank they use for the vitrification. If vitrification doesn't get ramped up, that 100,000 gal capacity that TSCR operates at, in other words, it pumps it into that tank at 100,000 gal a month. If they don't use it for vitrification, that 60,000 gal could go up. Then again, if DFLAW picks up operation, it gets moving quicker, that number could go down. We would anticipate, based on the graphic, about 60,000 gal a month. Again, we don't have a task order, but because of the graphic and the way it's been presented to the public, we're confident that we'll be able to see a task order for that here in the next several months.

[Mark Duff, President and CEO at Perma-Fix]

In addition to that, as I said in the script, the AMPS is coming online in late 2027, and is anticipated to be at full speed by 2028. That volume in 2028, they're anticipating to be 300,000 gal a month just from the AMPS itself. Again, a portion of that will go to vitrification at DFLAW, and a portion will come for grouting. Again, on the graphic, it specifically says that DOE anticipates 130,000 gal a month coming from the AMPS system once it gets up and running in 2028. You can kind of get a sense of what DOE is looking at as far as potential volumes in the near term. We're very excited about that, and we love that I'm showing that graphic. Like I said, they showed it today at the Hanford Advisory Board meeting.

[Mark Duff, President and CEO at Perma-Fix]

Again, to be clear, it's in DOE's presentations in the public space, but we don't currently have a task order for it. Just to give a little bit more color on the west side, the numbers are staggering. The West Side Removal System, which is called the WRMS, it's a different system. It's bigger overall, bigger infrastructure. That's designed to go at 3 million gallons a year. The total capacity for that system, plus the AMPS system and the TSCR system, DOE is saying, should exceed 6 million gallons a year annually. But their goal is to push those, and they have a plan to do that, and DOE has been very vocal that their goal is to get to 9 million gallons a year to be grouted sometime after 2030. Their goals are very high. They have a plan for them.

[Mark Duff, President and CEO at Perma-Fix]

Obviously, there's regulatory considerations along the way. But this administration has been very, very bullish about this program and the importance of showing and demonstrating progress for the $3 billion a year that makes up the Hanford budget, and the fact that it's been a long time coming for this program to actually show progress. We're really excited to be part of it. This, again, as I said in the script, the fact they didn't make an on-site award takes a lot of risk off the table for us. There's no provision for any other regional new construction as defined by the WIR document. Really, it's coming down to our cost versus our competitors and whether the DOE wants to transport liquids out of state for processing.

[Aaron Spychalla, Analyst at Craig-Hallum]

Great. Thank you for the color on that. We saw some of the recent modifications, Class 2, Class 3. Can you talk about how that might impact the dual glass-plus-grout strategy and any impact to those schedules?

[Mark Duff, President and CEO at Perma-Fix]

Yeah. This is all kind of new to us, too. I know the DOE has spent a lot of time working on getting the East Side accelerated. To meet the goals of the dual strategy, they had to make a couple of changes to their approach, which required some regulatory consideration in the form of permit mods. There are two mods. One was a Class 2 mod, and one was a Class 3 mod. What we are surprised about is the DOE submitted those mods to the state regulators, I think it was August 5th, just last week. The state turned those around in just a few days and got this out for public comment for a 60-day public comment period, which is right now scheduled to end on, I think, October 6th, if I remember correctly.

[Mark Duff, President and CEO at Perma-Fix]

That is a very aggressive turn on behalf of the state regulators, which we would speculate underscores the fact that the state is working with the DOE on this and is making it happen. If they meet that goal with the October 6th public comment period, barring not too many public comments that they should extend it, then the state would be in a position to provide potentially permit modifications by mid-October, late October. DOE could be in a position to actually start shipping waste for grouting later in Q4. Again, this is speculation. There are maybe some other things we do not understand overall, but just the general process for this to me and our staff shows that this was a collaborative effort between the two organizations and that this program can get going as they are hoping for to be in full stride in early 2027.

[Aaron Spychalla, Analyst at Craig-Hallum]

Great. Yeah. Hope so. One more question. In the RFP announcement, the DOE mentioned the EMF waste stream to be included in that contract, too. Do you anticipate any impact to the EMF program that you are seeing? It sounds like that has started to pick up here. I know you do not guide kind of quarterly, but it sounds pretty constructive on improvements in the third quarter, maybe partially driven by that. If you could talk about that a little bit.

[Mark Duff, President and CEO at Perma-Fix]

Sure. The EMF contract we have now was one that was put together pretty quickly and was not competitive. They had to use an existing contract vehicle, which has the prime for this vehicle to be the disposal facility, EnergySolutions. They are the prime, and we do the grouting for EMF, and we provide that to EnergySolutions, and they dispose of it. What we are anticipating is that because of the modification in this H2C award and as defined in the press release from them, EMF will be a task order within the new contract.

[Mark Duff, President and CEO at Perma-Fix]

We do expect to receive that, again, keeping in mind that we would anticipate this is covered in the ROD for DFLAW and that we would treat this waste under just a new task order within the new contract, and that we would ship it to the appropriate disposal facility once that task order is initiated after the first of the year. Again, we would expect that. Also that is kind of reiterated or defined in the graphic I mentioned as well. We have pretty high confidence that will continue moving. Right now, I know people are probably wondering how much DFLAW waste we are getting. DFLAW has been chugging along at about 10,000 gal a month on average, which is, as you know, their goal was about 100,000 gal a month. So it is about a tenth of the operation.

[Mark Duff, President and CEO at Perma-Fix]

We are not getting significant quantities at this point. That is increasing. I was told that they did 35,000 gal in July and are expecting to beat that significantly in August this month. At the 10,000 gal a month level, we are getting about $200,000-$250,000 in a month in EMF waste and a little less than that for our first shipment from the dry waste. So it is a pretty nominal amount at this point, but we do expect that to be ramping up. The facility is getting stronger. They are working through their issues. There was an announcement in the press today that the feed system has been replaced. They are working through the emission systems.

[Mark Duff, President and CEO at Perma-Fix]

They are getting through the issues, and DOE is confident that they can still get ramped up to a higher percentage of operation capacity here in the next couple of quarters, and we will likely see those quantities of waste significantly increase as they do get to a larger operating capacity.

[Aaron Spychalla, Analyst at Craig-Hallum]

Good. Then maybe one last one, if I could, just on the permit expansion. You kind of talked about the timeline in mid-2027. Can you just talk about costs and investments there, investments in the labor force, just as we think about what that looks like and bringing that on?

[Mark Duff, President and CEO at Perma-Fix]

Yeah. We're very encouraged by the relationship with Department of Ecology. As you know, it took more than a decade to get our renewal. It was a difficult process. They've done very well in the last couple of years here, and they're working with us in a very supportive manner. We started working with them in February for our permit mod to increase our total capacity to meet DOE's total capacity, as I mentioned, which is right now is about 9 million gallons a year. We've got the designs completed for the mixtures that we need to install. We also have poured concrete already, begun to purchase some of the heavy equipment so our folks can get trained on it. We have started different components of the infrastructure upgrades as well to support the larger volumes. So we have begun making those improvements.

[Mark Duff, President and CEO at Perma-Fix]

The permit right now is expected to take about a year, maybe nine months. So what we do hope to have that in place for the large volume increase by end of Q2 next summer, or sometime in Q2 of 2027. I think we're on track for that, barring any unforeseen issues along the way. They're working very well with us, so we don't see any reason why that wouldn't be a milestone that we can meet. So we have some ways to go. We haven't pulled the trigger on the new mixtures yet. We wanted to get this award first and get a feel for what the contract said. But we are anxious to get started with that, and we have a lot of confidence that DOE is going to start meeting the grouting objectives that they've defined, that they've put in these documents.

[Mark Duff, President and CEO at Perma-Fix]

We want to make sure that we can handle all of it and hopefully be in a position to deliver without any constraint to DOE in regards to our processing.

[Aaron Spychalla, Analyst at Craig-Hallum]

Great. Thank you for taking the questions. I'll turn it over.

[Mark Duff, President and CEO at Perma-Fix]

Thanks, Aaron.

[Operator]

Thank you. Our next question is coming from Yuan Zhi with B. Riley. Your line is live.

[Yuan Zhi, Analyst at B. Riley]

Thank you for taking our questions. I have a couple of them, mainly on today's master subcontract. First, can you please clarify what's your peak processing capacity and how long does it take to ramp up to that level so that you can meet the H2C demand?

[Mark Duff, President and CEO at Perma-Fix]

Sure. Right now, our capacity, including our permit and our equipment, is 1.2 million gallons a year, about 100,000 gal a month. We are modifying our permit to increase that to over 10 million. We expect that to take, as I mentioned, sometime into Q2 of next year. It may take a little bit longer than that to get everything deployed, but we are confident that we will have that in place when DOE gets to their AMPS operating, as I mentioned, which can operate about 400,000 gal a month with the TSCR. We will be ready for that when it starts, so that we are in a position to keep up with any waste that DOE might have.

[Yuan Zhi, Analyst at B. Riley]

Got it. Maybe a quick follow-up. In addition to the permit from Washington State, any other bottlenecks you see, like equipment update or facility expansion, will be needed for this ramp up?

[Mark Duff, President and CEO at Perma-Fix]

No. That is a good question. No, we do see the primary critical path is the state. Again, we are modifying a quantity from, I guess as I said, 1.2 million upwards to 10 million. It is a process we already do. We have a similar type of mixer, almost exact same technology that we are currently using now. So what we are asking for is pretty much increase the quantity, then you have to address the risks or operational considerations to make that increase. So we do not see that as a heavy lift, and the state has not either so far. So we expect that to go through, but we see that as really the only hurdle we have between here and there is that, is getting that through the regulatory body.

[Mark Duff, President and CEO at Perma-Fix]

We have our guys at our Northwest plant have met with the vendors associated with the mixing technology, spent some time with them. They have worked directly with them to run surrogate types of materials that look just like the waste we are going to be receiving and to ensure that the grouting product meets our standards. So they have spent some time making sure that will happen and done some analytical work along that route as well. Everyone is very comfortable. This is the same mixer that is used at the other DOE facilities, so it is a mixer that DOE is comfortable with and it is proven. So we are going to have a significant amount of redundancy with these additional mixtures and the mixtures we have now, so that if one goes down, we can keep maintaining that.

[Mark Duff, President and CEO at Perma-Fix]

That was a big component in the RFP that we responded to and this contract was awarded on, is DOE wanted to make sure that each awardee would be able to handle that redundancy and have a plan to make sure that we do not hold them up as they are generating this waste for grouting. We feel like we have done that in a big way.

[Yuan Zhi, Analyst at B. Riley]

Got it. Based on the maximum cumulative quantity of 50 million gallons and maximum cumulative value of $4.3 billion, is it reasonable to assume the average revenue per gallon is about $88?

[Mark Duff, President and CEO at Perma-Fix]

That is a tough question. I cannot answer that specifically. The reason it is difficult to answer is because there is a lot of factors associated with this contract. For example, there are rates for just your basic 80% of the waste that they are anticipating being a certain type of waste with certain constituents that can be grouted very quickly and easily. There are provisions for certain waste streams to have high organics and metals in it that will have to be treated with additional enhancements in the treatment, which bear an additional surcharge, so to speak. There are also different types of waste that can come in with higher radioactivity, which we call Class B and C waste. Those are significantly higher cost.

[Mark Duff, President and CEO at Perma-Fix]

You could probably say an average might be at that point, but I think it would be wrong because it could all be the easy stuff, and you would hit the 50 million gallon limit before you got to the $4.3 million. On the other hand, if it is very complicated waste, it could be more than $80 a gallon, and you could reach the $4.3 million limit before you got to 50 million gallons. Because of the uncertainty associated with each tank, you just cannot make that general statement like that, but it is a starting point for estimating the total volume and price.

[Yuan Zhi, Analyst at B. Riley]

Got it. And maybe one last question from us. On the long term, how should the investors think about the revenue visibility and the potential lumpiness as the Hanford volume scale versus your historical streams and patterns?

[Mark Duff, President and CEO at Perma-Fix]

Yeah, I think this is by far the most sustainable waste stream our company's ever seen as far as the long-term nature of it and the homogeneity of the waste itself. While I just mentioned a number of different variables, it is still liquid waste that can be transported in a specific container or set of containers, and you can anticipate time and resources very well. So compared to historical, we expect it to be much more sustainable and consistent than our historical lumpiness with waste. DOE's been very clear in the RFP process that it's going to be a lot of outages and the pumping and treating for grouted waste would only be, I think RFP specifically said about 50% production. In other words, they'll be up 50% with grouted waste and down as they move from tank to tank.

[Mark Duff, President and CEO at Perma-Fix]

Which is why they want you to be able to store a lot of it and receive it at a very high rate, and then be able to work through your inventory once you store it and start processing it. I'm not sure if I answered your question, but we do see a pretty average annual revenue for this overall. Particularly in consideration of the east side where they have a very sophisticated infrastructure for all the tanks. On the west side, they move more from tank to tank to tank, and it could have a little lumpiness. But with the east side and west side together, I think it's going to smooth it out a lot to the point where we can make good forecasts relative to what waste volumes we anticipate getting from a year-on-year basis.

[Yuan Zhi, Analyst at B. Riley]

Got it, and congrats on winning this master contract.

[Mark Duff, President and CEO at Perma-Fix]

I'm sorry, I didn't understand the question.

[Yuan Zhi, Analyst at B. Riley]

Oh, that's the end of my question. Congrats on winning this.

[Mark Duff, President and CEO at Perma-Fix]

Oh, congratulations. Okay. Thank you. Thank you very much. Appreciate that, Yuan Zhi.

[Operator]

Thank you. Our next question is coming from Steven Fine with SoFine LLC. Your line is live.

[Steven Fine, Analyst at SoFine LLC]

Congratulations, guys. Congratulations, Mark, and congratulations, guys. This is the culmination of a lot of time, and it's amazing that things have come together. I've watched this for the last eight, nine years, and you've pulled this together. All right, so here's my questions. Number one, you say you're going to build a plant, and it's going to be done next year. So what will the capacity be then at that plant?

[Mark Duff, President and CEO at Perma-Fix]

Yeah. Again, our modifications, just to be clear, Steven, are in existing buildings. We're not having to build any new buildings. We'll have to do some upgrades, as I mentioned, to the infrastructure, the HVAC, and the power. A lot of concrete pouring to handle large volumes of trucks coming in and out. A lot of equipment we have to buy. But pretty much the primary job is installation of the mixers. The mixers we're going to install will be basically, the capacity of each mixer will be adequate to cover the DOE receipts. Again, I don't want to get into details of what we're doing because it's really kind of proprietary at this point. But we're in a position, as I've said over and again, to meet the DOE demand. That demand is expected to get to 9 million gallons by 2030.

[Mark Duff, President and CEO at Perma-Fix]

We're going to be prepared to meet that need with the mixers we're installing.

[Steven Fine, Analyst at SoFine LLC]

By next year or by 2030?

[Mark Duff, President and CEO at Perma-Fix]

By next year. When they're installed, right now, I'm sorry if I wasn't clear on that, Steven. Our permit mod and our installation, we're expecting to be up and running by this time next year.

[Steven Fine, Analyst at SoFine LLC]

All right. You also mentioned that, which I was a little confused about, that the government is saying that stuff could come in different ways and that you may have to store. When you're finished with all these upgrades, what will be your storage capacity?

[Mark Duff, President and CEO at Perma-Fix]

Right now, our storage capacity is about 650,000 gal. Our permit mod will take that number up to 800,000 gal. We'll have plenty of storage capacity.

[Steven Fine, Analyst at SoFine LLC]

You're saying that if, let's say you, I'm inferring from this, you're saying that potentially you could do 10 million gallons a year, but you would only have storage for 1 million gallons at a time?

[Mark Duff, President and CEO at Perma-Fix]

A little bit less than that. So basically, we'll be operating at a pretty rapid pace.

[Steven Fine, Analyst at SoFine LLC]

Okay.

[Mark Duff, President and CEO at Perma-Fix]

And we'll be able to take

[Steven Fine, Analyst at SoFine LLC]

That's great.

[Mark Duff, President and CEO at Perma-Fix]

receipt of that waste, and if we have an outage or something, we'll be able to handle receipt of that waste, correct.

[Steven Fine, Analyst at SoFine LLC]

All right. Would you agree that it is pretty significant that the government is now saying that they are going to grab some of the stuff that was going to go for vitrification?

[Mark Duff, President and CEO at Perma-Fix]

Yeah. I don't know if I underscored that enough, but DOE has been very clear to other stakeholders and publicly that the DFLAW is their primary approach, and that grouting is a supplement to vitrification. DOE is looking at this pragmatically, saying, "Hey, the bottom line is, our goal should be to close as many tanks as we possibly can for the budget we have." That is why this dual strategy has come to the surface. So they are recognizing the fact that while we do want to do the treatment of the vitrification and dispose of the vitrified waste at the Hanford landfill, to really begin to close tanks for the same budget, this grouting makes a lot of sense because it is substantially cheaper, as I mentioned. So, yeah, we are excited about it. The regulators are cautiously optimistic as we are reluctant to jump in with both feet.

[Mark Duff, President and CEO at Perma-Fix]

They have said publicly many times that they don't want DOE to get us distracted by grouting. This administration has been very focused on progress, and at Hanford, particularly with questioning everything to optimize our approach and to consider commercial value and commercial approaches that can really save money. This is one of them. If you look at some of the older testimonies by former secretaries of energy, when Congress asked them, how are you going to get to where this facility is closed, and how long is it going to take? If it is 100 years and it is $10 billion a year, that is never going to happen. Grouting puts the entire life cycle of the closure into perspective where it can happen, and it can happen aggressively if DOE steps up and supplements the program with this type of approach.

[Steven Fine, Analyst at SoFine LLC]

Right. Is it not true that every gallon of waste that you would get, you would be able to environmentally safely treat that waste, while the vitrification plant, when it gets a gallon, it basically can only vitrify maybe 40%-50%, let's say? I think the average I have read is around 40% efficiency. Do you agree with that point?

[Mark Duff, President and CEO at Perma-Fix]

I'm not sure exactly where you're getting that from, Steve.

[Steven Fine, Analyst at SoFine LLC]

What I'm basically saying is that the vitrification plan is about 35% efficient. That means that if 1,000 gallons is fed in there, only about 350 gal-400 gal is going to be vitrified, and the rest is a secondary waste. While if you get stuff directly, all 100% of it is done.

[Mark Duff, President and CEO at Perma-Fix]

Well, I can say that for grouting, yes, all 100% is done. I think maybe some confusion on behalf of vitrification. All 1,000 gal that you mentioned, when it goes in, it all gets vitrified. So they will vitrify 100% of the liquids that go in. I think what might be confused with is they'll be generating, the term that's used typically is 3 gal of waste for every gallon that goes in. So they do have a lot of waste that comes out of it as part of the treatment process. It's not the tank waste necessarily, but what we call secondary waste that comes out of it. And that can be everything from dry waste like filters and PPE that people wear to other chemical-based waste streams, and what they call EMF waste, which addresses the tank bottoms and the scrubbing systems and the emissions.

[Mark Duff, President and CEO at Perma-Fix]

That's all part of the other liquid generation that comes out.

[Steven Fine, Analyst at SoFine LLC]

All right.

[Mark Duff, President and CEO at Perma-Fix]

They do generate waste.

[Steven Fine, Analyst at SoFine LLC]

All right. What I am essentially trying to say is my understanding, and I guess maybe I am touching on sensitive things here, is that you essentially said it. Whatever is vitrified, they are still generating waste. Whatever you get, you process, and there is no waste generated, correct? That is a distinct difference. Am I correct on that point?

[Mark Duff, President and CEO at Perma-Fix]

That is correct. Yes.

[Steven Fine, Analyst at SoFine LLC]

Okay. The next thing is, they talk about volume. All right, so there's 50-some million gallons in those tanks. My understanding is they've got to liquefy that stuff to be able to process it, because it's a solid mass, which potentially could mean that there's, what, 150,000 gal-200,000 gal that have to be processed. Is that true?

[Mark Duff, President and CEO at Perma-Fix]

That is true. They're estimating-

[Steven Fine, Analyst at SoFine LLC]

Okay

[Mark Duff, President and CEO at Perma-Fix]

A minimum of 3 gal of water or liquid has to be included to get the tank waste out. The DOE has stated before publicly that they're estimating about 200 million gallons in total will have to be processed. That's correct.

[Steven Fine, Analyst at SoFine LLC]

Right. So basically, if you're processing 1 million gallons, you have the capacity to process 1 million gallons right now, and you could process that 1 million gallons, one could argue that that would be 3 million gallons that would go through the vitrification plant. Is that true?

[Mark Duff, President and CEO at Perma-Fix]

No, I don't think it's that simple, that they generate 3 million gallons for every million gallons that goes in. I don't have the exact or a complete understanding of all the waste that's going to be coming out. The reason I say that, Steve, is I don't know how linear it is. None of us do yet. That's why we have a tough time with the estimates for waste coming out of DFLAW is that we're not sure. Right now they're running at 10,000 gal a month, and we're getting 8,000 gal of EMF a month. Does that all go up by 10 when it gets to full capacity? We don't know that yet. I don't know what that ratio would be at full capacity or full operations. I'm afraid I can't answer that question.

[Steven Fine, Analyst at SoFine LLC]

Well, the real question is, and I guess you'll probably never talk to me again, the real question is: Is the vitrification going to augment and flow as it's been flowing like a nightmare? The other thing is, you guys are environmentally safe. Everything you do is safe. While you're talking an environmental nightmare over there. I said that, I didn't ask the question. But the bottom line here is Savannah grouted, and the government has finally woken up. I'm glad to hear, in these challenging times, that the government is finally seeing the reality that there's a lot of waste there, and also, more importantly, that the waste is of a form that is more suitable to grouting than it is to vitrification.

[Steven Fine, Analyst at SoFine LLC]

The other point that comes out of this, when you talk about this gradation scale of what you would be charging based on the waste, isn't that also an issue if you start transporting this stuff, if you don't know if the waste can vary?

[Mark Duff, President and CEO at Perma-Fix]

Yeah, I think you'll know that before you transport it, and they'll have to have a suitable transportation container that aligns with that. Basically, when they put the RFP together, they ask the bidders to make sure that you have a plan for each of the types of waste that you are getting, how you're going to treat it, how you're going to transport it, and costs associated with each. So there's a plan for that to make sure that each type of waste you possibly get could be dealt with sufficiently and within the rates you provided.

[Operator]

Thank you. Unfortunately, ladies and gentlemen, we have reached our allotted time for question and answers, so I am afraid I will have to turn it back over to management for closing remarks.

[Mark Duff, President and CEO at Perma-Fix]

Okay. Thank you. Thank you all for your questions, and thank you for joining us this afternoon. I want to leave you with this. The second quarter was disappointing financially, and I am not going to characterize it in any other way. We received the waste we said we would receive, grew backlog 29%, DFLAW receipts have commenced, H2C has awarded a master subcontract for the Hanford tank waste grouting, and DOE has named our facility and the plan it presented publicly for the largest waste treatment program at Hanford. We have the capacity, the permits, and the balance sheet to support it. We are highly encouraged by the outlook of the second half of 2026, but the opportunity ahead of us is much bigger. Our facility is permitted today for 1.2 million gallons per year, and DOE's plan contemplates 9 million gallons annually by 2030.

[Mark Duff, President and CEO at Perma-Fix]

This is the scale of the program we are building capacity to serve. It is not a project or a projection. It is a program measured in decades tied to a cleanup mission federal government is legally obligated to complete. We look forward to updating you on our progress in the future. Thank you.

[Operator]

Thank you. Ladies and gentlemen, this does conclude today's conference, and you may disconnect your lines at this time. We thank you for your participation.

Participants

Executives

• Mark Duff, President and CEO
• Ben Naccarato, EVP and CFO

Analysts

• David Waldman, President and CEO at Crescendo Communications
• Aaron Spychalla, Analyst at Craig-Hallum
• Yuan Zhi, Analyst at B. Riley
• Steven Fine, Analyst at SoFine LLC