Perma-Fix Environmental Services NASDAQ: PESI reported lower revenue and wider losses in its fiscal first quarter of 2026, a period CEO Mark Duff described as “transitional” as the company prepared facilities and personnel for higher expected activity beginning in the second quarter.
“While our financial results were weak, this was not unexpected,” Duff said, citing seasonal softness, lower waste receipts, the timing of revenue milestones, and steps taken to increase operational readiness. Management emphasized that the company used the quarter to work down existing waste inventories—particularly at its Perma-Fix Northwest facility—while completing treatment of “several lower-margin waste streams” to improve future mix and capacity availability ahead of anticipated Hanford-related volumes.
Quarterly financial results
Chief Financial Officer Ben Naccarato said first-quarter revenue was $11.1 million, down from $13.9 million in the prior-year period. He attributed the $2.8 million year-over-year decline primarily to “lower volumes and timing of processing activity” as Perma-Fix worked through inventory and faced delays in reaching certain revenue milestones.
By segment, Naccarato said:
- Treatment segment revenue declined about $1.3 million year-over-year due to lower volumes and a “less favorable waste mix,” which outweighed “modest pricing improvements.”
- Services segment revenue decreased about $1.5 million year-over-year as fewer large projects contributed compared to the prior year, partially offset by contributions from smaller projects.
Gross profit fell $3.5 million compared with the year-ago quarter, driven by lower revenue, higher variable costs in the treatment segment, and “higher fixed plant costs” tied to preparations for higher expected volumes. Naccarato added that project mix and lower services revenue also weighed on profitability. SG&A expenses rose to $4.3 million, up about $284,000 year-over-year, primarily due to higher labor, outside services, and marketing-related costs.
EBITDA from continuing operations was a loss of $7.0 million versus a loss of $3.3 million in the first quarter of fiscal 2025. Net loss widened to $7.5 million, or $0.40 per share, compared to a $3.6 million loss, or $0.19 per share, a year earlier.
On the balance sheet, Naccarato said cash ended the quarter at $6.7 million and working capital was $5.9 million, both down year-over-year due to operating cash usage and capital spending. Cash used in operations was $3.6 million, while investing activities used about $964,000 (primarily capital spending and permitting-related intangible assets) and financing activities used about $227,000 (scheduled debt and lease payments).
Treatment backlog ended the quarter at $12.2 million, up slightly from $11.9 million at year-end and up from $10.2 million in the first quarter of 2025.
Hanford: moving from preparation to execution
Duff said the “centerpiece” of Perma-Fix’s growth opportunity remains Hanford, where the Department of Energy cleanup mission is “one of the largest and most complex environmental remediation programs in the U.S.” He highlighted the December 2025 renewal of the Perma-Fix Northwest permit, which he said expands permitted liquid mixed waste processing capacity to about 1.2 million gallons annually and authorizes treatment of up to 175,000 tons of waste through macroencapsulation.
Duff said the Perma-Fix Northwest facility began receiving ETF waste from Hanford in mid-April, which he believes “can support sustainable revenues of more than $4 million per quarter as the waste stream continues.” In the Q&A, Duff told Craig-Hallum analyst Aaron Spychalla that ETF shipments are “between $1 million-$1.5 million a month in revenue as expected,” and he anticipated the stream would continue “at least through Q3 and into Q4 at a minimum,” noting Hanford typically experiences an outage when temperatures get too cold.
Regarding other Hanford-related streams, Duff said an EMF waste stream—he later identified as “Effluent Management Facility”—had been delayed by an extended regulatory comment period. He said DOE indicated Perma-Fix should expect the first EMF shipment in late June. During hot commissioning, he said, it would run at about $300,000 per month, with revenue increasing by roughly four times once in operational phases.
Duff also discussed dry waste and TRU waste. He said the company was beginning to coordinate receipts for the dry waste stream and estimated it could be about $100,000 per month, though volumes and linearity were uncertain given stockpiling. For TRU waste, he said Perma-Fix is increasing capacity with a goal of doubling throughput by adding shifts and capacity, supported by additional training and personnel.
Grouting proposals and timeline expectations
Management repeatedly pointed to potential longer-term grouting opportunities at Hanford. Duff said there are “two grouting programs,” referencing west-side plans and east-side supplemental activity. On the west side, Duff described an RFP the company responded to as a “$4 billion contract” to grout about 50 million gallons over time, with bidders required to be ready to start receiving waste in January 2028. Duff said the company had proposed permit modifications and additional infrastructure to reach over 4 million gallons per year of capacity and said he hoped for an award announcement before the next earnings call in July.
In response to questions from Wellington Shields analyst Howard Brous, Duff said that on the east side, “if we were able to secure 300,000 gal in the next 12 months, we’d be pretty excited about that,” adding it was a target rather than a DOE-provided number. For the west side, he said the design capacity of the extraction system is “right around 3 million gal a year,” and referenced public comments from DOE leadership about aiming to exceed that and potentially reach closer to 6 million gallons per year over time.
Duff also detailed Perma-Fix’s internal timing expectations if it receives an award. He said the company has already begun working with the state on permit modifications and completed much of its design work for new grouting equipment. Assuming an award in July, Duff said Perma-Fix committed to DOE that it would have 3.0 million to 4.2 million gallons of capacity within 18 months, targeting October 2027 for 4.2 million gallons of liquid waste capacity.
Services momentum, PFAS, and other programs
Beyond Hanford, Duff highlighted a two-year master task agreement awarded during the quarter by the Lawrence Livermore National Security site, valued at approximately $24 million, for demolition and disposal of a building at Lawrence Livermore National Laboratory. Duff said the project mobilized and began work in early April and that the services segment has also mobilized on smaller projects that could grow through the summer.
On the Navy’s USS Enterprise decommissioning opportunity, Duff said the project was previously awarded to another bidder, later protested, and then reopened through a “final proposal revision” process with proposals resubmitted April 24. He said the Navy anticipated an award sometime in June. While he said he could not discuss procurement specifics, Duff noted the government estimate for the overall project was between $500 million and $800 million and said the RFP included small business goals he believed were “between 20% and 30%” of that amount.
On PFAS, Duff said Perma-Fix completed a PFAS treatment project for Four Rivers Nuclear Partnership at the Paducah site, receiving about 1,500 gallons of PFAS-contaminated liquids and treating it using the company’s patent-pending Perma-FAS destruction technology. He said PFAS receipts slowed during the quarter but resumed in May, supported by “new wins at regional airports.” He also said the company is continuing installation of a Gen 2 unit at its EWOC facility in Oak Ridge, expected to add about 2,000 gallons per shift of treatment capacity, though construction experienced supply chain and fabrication delays.
Duff also discussed a first contract in the mining industry using Perma-Fix’s sorting technology. He said the work would go into the field in June and described the system as segregating radioactive components from soil or debris to reduce waste volumes or concentrate source material, though he said the client was confidential.
Looking ahead, Duff said the company has seen improvement in April, though he declined to provide monthly financial details. He reiterated that management expects a “significant improvement over Q1” and views the second quarter as an inflection point as Hanford-related receipts increase and services work ramps.
About Perma-Fix Environmental Services NASDAQ: PESI
Perma-Fix Environmental Services, Inc 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.
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