PESI

Good day, ladies and gentlemen, welcome to the Perma-Fix Fiscal First Quarter 2026 earnings conference call. At this time, all participants are placed on a listen-only mode, a question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. David Waldman, Investor Relations. Sir, the floor is yours.

Thank you, good morning, everyone. Welcome to Perma-Fix Environmental Services first quarter 2026 conference call. On the call with us this morning are Mark Duff, President and CEO, Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing first 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'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures.

All statements on this conference call, other than statements of historical 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 morning's press release. The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements. Today's discussion will include references to non-GAAP measures. Perma-Fix believes such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website.

Now I'd like to turn the call over to Mark Duff. Please go ahead, Mark.

All right. Thank you, David. Good morning, everyone. Thank you for joining us today. As you saw in this morning's press release, the first quarter was a transitional period for Perma-Fix. While our financial results were weak, this was not unexpected. Many of the factors that impacted the quarter were consistent with what we discussed on our year-end call in March, including seasonal softness, lower waste receipts, the timing of achieving revenue milestones, and the deliberate steps we're taking to prepare our facilities, workforce, and infrastructure for higher activity levels beginning in the second quarter. Importantly, the first quarter should not be viewed in isolation. We used the quarter to position the company for the next phase of activity. This included the deliberate processing and reduction of existing waste inventories, particularly at our Perma-Fix Northwest facility, so we could maximize capacity ahead of anticipated Hanford-related waste receipts.

We completed treatment of several lower-margin waste streams during the quarter, which further positions our facilities to improve mix and higher value activity as new receipts begin to ramp up. We continued investing in personnel, training, facility improvements, and operational readiness to support additional shifts and higher production expectations beginning in Q2. These activities impacted near-term financial performance, we believe they were necessary to prepare Perma-Fix for what may be one of the most important growth opportunities in the company's history. The centerpiece of that opportunity remains Hanford. We've discussed for some time, the DOE Hanford's cleanup mission represents one of the largest and most complex environmental remediation programs in the U.S. Perma-Fix Northwest is located just outside the Hanford site, we believe it's uniquely positioned to support multiple Hanford-related waste streams over the coming years.

A key milestone in our preparation for this opportunity was the December 2025 renewal of the permit for our Perma-Fix Northwest facility, which significantly expands our permitted liquid mixed waste processing capacity to approximately 1.2 million gallons annually and authorizes treatment of up to 175,000 tons of waste through macroencapsulation. Combined with our investments in automation, facility upgrades, and workforce expansion, this enhanced permit materially strengthens our ability to support increased volumes from Hanford and other DOE mission objectives as activities ramp up. We are now beginning to see the opportunity move from preparation towards execution. Our Perma-Fix Northwest facility began receiving ETF waste from Hanford in mid-April, which we believe can support sustainable revenues of more than $4 million per quarter as the waste stream continues.

We're also working closely with DOE contractors on the anticipated start of the additional DFLAW related dry waste and EMF effluent waste streams, which were delayed due to regulatory document extensions. Based on current activity, we believe Q2 represents an inflection point for the company with Perma-Fix Northwest on track to deliver stronger revenue contributions as Hanford-related waste receipts and other customer activities increase. While the exact timing and pace of these activities of these receipts remain dependent on DOE and contractor schedules, we remain highly encouraged by the directions of the activity and the role Perma-Fix can play in supporting the Hanford cleanup mission. In addition, DOE leadership continues to focus on advancing Hanford tank waste retrieval through grouting as a supplement path to DFLAW using available commercial treatment capacity.

We believe this is highly significant for Perma-Fix because Perma-Fix Northwest provides additional local capacity near the Hanford site and is positioned to support DOE's tank waste treatment objectives over the next several years. Beyond the near term ETF and DFLAW related activities, we remain extremely focused on the broader grouting opportunities at Hanford. We believe Perma-Fix Northwest is exceptionally well-positioned for this opportunity given its proximity to the Hanford site, our expanded permitting profile, existing waste treatment capabilities and investments we've made over the past several years to expand grouting capabilities to reach production levels of over 4 million gallons of tank waste receipts per year. This is why we're so bullish on Hanford. It's not simply one waste stream or one contract opportunity.

It's a long duration remediation mission with multiple potential waste streams, multiple program phases, and the potential to support recurring treatment demand over an extended period. While timing will always be subject to government program execution, appropriations and regulatory requirements along with customer schedules, we believe the scale and duration of the opportunities are significant. We also recently completed several large proposal initiatives, including opportunities related to the Hanford tank grouting, large project services, for the U.S. Army Corps of Engineers, and DOE at Y-12, and a proposal revision to support the USS Enterprise aircraft carrier decommissioning project for the Navy. While these opportunities remain subject to award timing and customer decisions, they reflect the breadth of our pipeline and the alignment of our capabilities with large, complex government remediation and decommissioning and other waste missions.

In addition to Hanford, we're also seeing renewed momentum in our services segment. During the quarter, we were awarded a 2-year master task agreement valued at approximately $24 million by the Lawrence Livermore National Security site for demolition and disposal of a building at the Lawrence Livermore National Laboratory. This project mobilized and began supporting work in early April. It draws directly on our expertise in complex radiological and hazardous waste handling, and facility decontamination, along with demolition, and nuclear waste management. We view this award as an important validation of our nuclear services capabilities and our long-standing relationship with the Livermore Lab. More broadly, we've mobilized on several additional smaller projects that have the potential to grow through the summer, and we continue to see a meaningful pipeline of project opportunities across nuclear services for demolition, remediation, decontamination, and other government-related field work.

This is important because renewed services segment activities strengthens our broader Perma-Fix platform by leveraging our integrated capabilities across project execution, waste management, transportation, treatment, and disposal. We also continue to make progress with our PFAS destruction platform. As we announced in March, we successfully completed a PFAS treatment project for Four Rivers Nuclear Partnership, the DOE contractor responsible for environmental cleanup activities at the Paducah site. We received approximately 1,500 gallons of PFAS contaminated liquids and successfully treated the material using our patent pending Perma-FAS destruction technology. This is an important precedent application for our technology supporting DOE cleanup activities and meeting the strict quality control programs as required by the department. PFAS contamination continues to represent one of the most significant environmental challenges facing both the government and commercial clients.

Our approach is designed to permanently destroy PFAS compounds rather than simply transferring them to another medium. We believe this distinction is important as customers increasingly look for solutions that can reduce long-term environmental liabilities. During the quarter, PFAS receipts slowed, activity resumed in May, supported by several new wins at regional airports, and continued work through partnerships with generators and industry leaders focused on the destruction of PFAS liquids. We're also continuing the installation of our gen 2 unit at our EWOC facility in Oak Ridge, which is designed to add approximately 2,000 gallons per shift of additional treatment capacity to support our existing operations. While construction experienced some supply chain and fabrication delays, assembly activities are moving forward, we expect the system to meaningfully expand our capacity once it's operational.

Taken together, we believe PFAS represents a compelling long-term growth opportunity that complements our core nuclear and mixed waste treatment capabilities. We are still early in the commercialization curve, the market need is real. Regulatory and customers' attention continues to increase, we believe our destruction technology gives Perma-Fix a differentiated position. Stepping back, the broader message is straightforward. Q1 was difficult, it was also preparatory for us. We're now beginning to see the transition we've been preparing for begin to materialize across the business. At Hanford, ETF waste receipts began in April, additional DFLAW related streams are expected to follow. In nuclear services, the Livermore project has mobilized our project pipeline is improving. In PFAS, we've demonstrated our technology in the field, secured additional opportunities continue to expand capacity.

In the Perma-Fix Northwest, our expanded permit and the facility investment that we made position us to support the long-term waste receipts and longer-term grouting opportunities. We believe Perma-Fix is at a clear inflection point. The investments we've made over the past several years in permits, people, infrastructure, automation, treatment capacity, and technology were all designed to prepare the company for the type of opportunities set now that is developing in front of us. Although quarterly results may continue to vary based on the timing of customer shipments, government programs, and project mobilizations, we believe the company is increasingly well positioned to deliver improved performance beginning in the second quarter through the balance of 2026 and over the long term as these opportunities continue to scale up.

With that, I'll turn it over to Ben to review the financial results in more detail. Ben?

Thanks, Mark. Good morning. For the first quarter, we reported revenue of $11.1 million. That's down from $13.9 million in prior year, a decrease of about $2.8 million year-over-year. The decline was primarily driven by lower volumes and timing of processing activity as we focused on working through existing waste inventory and encountered delays in reaching certain key revenue milestones. Looking at the segments, in the treatment segment, revenue was down about $1.3 million compared to last year. This was mainly due to lower volumes and a less favorable waste mix, which more than offset some of the modest pricing improvements.

In the service segment, revenue decreased about $1.5 million year-over-year. This was largely due to fewer large projects contributing to revenue compared to prior year, partially offset by contributions from new smaller projects. From a profitability standpoint, gross profit declined $3.5 million compared to prior year. This reflects the impact of the lower revenue and the higher variable costs in the treatment segment and higher fixed plant costs as we prepare for higher volume expected in the upcoming months. Project mix and lower revenue in the service segment also negatively impacted our gross profit. Our SG&A expenses were $4.3 million, up about $284,000 year-over-year, primarily due to higher labor expense, outside services, and marketing related costs.

Turning to earnings, EBITDA from continuing operations was a loss of $7 million compared to a loss of $3.3 million last year. Our net loss was $7.5 million versus $3.6 million loss in prior year, a loss per share of $0.40 compared to $0.19 last year. On the balance sheet, cash ended the quarter at $6.7 million, and working capital was $5.9 million, both down from prior year levels, reflecting operating cash usage and capital spending during the quarter. Our treatment backlog ended the quarter at $12.2 million, up slightly from $11.9 million at year-end, and up from the $10.2 million we saw in the first quarter in 2025. From a cash flow perspective, cash used from operations was $3.6 million.

Investing activities used approximately $964,000, primarily for capital spending and permitting-related intangible assets. Our financing activities used approximately $227,000, mainly related to scheduled debt and lease payments. With that, operator, I will now turn the call over for questions.

Thank you. At this time, we'll 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. 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 your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question today is coming from Aaron Spychalla with Craig-Hallum. Your line is live.

Yeah, good morning, Mark, Ben, and Lou. Thanks for taking the questions. You know, maybe first for me on Hanford, can you just kinda give an update on kind of the incremental waste streams that you're seeing? You know, you talked about ETF and maybe 4 million a quarter it sounds like. You know, last call there was some talk of 1 million or 2 a month. So just wanna make sure, you know, we have those kinda incremental opportunities kinda straight as we look for DFLAW to start up.

Sure, Aaron. you know, there's four primary waste streams that we're receiving at Hanford right now. There's a lot of other ones that are smaller, but, and a few that are gonna be showing up here this quarter. ETF is the big one. It's been showing up or being received, as I mentioned, by the middle of April. We're getting regular shipments from them as scheduled. It is between $1 million to $1.5 million a month in revenue as expected. It's going very well so far.

It is expected to go through at least through Q3 and into Q4 at a minimum, where they usually have an outage when it gets too cold. That is going very well. No expectations for any impacts from that. The EMF waste, as you probably remember from the press releases, was the low-level waste from DFLAW. That was scheduled to complete its supplemental analysis process, which is regulatory process, on April 24th. They extended that comment period for that NEPA process for 30 days to May 24th. We met with DOE last week at senior management levels. They said to expect to receive the first shipment in late June.

That will run at about $300K a month for during hot commissioning. Once we get to operational phases, that will increase by 4 times. It will be anticipated to be received at those levels, at a minimum, through the operational period, which we're anticipating to be in the fall in regards to DFLAW. We also have the dry waste that we're beginning to actually start to communicate with them on. They've been storing them for a bit. We are working with them on receipts. We're still not sure what kind of revenue that's gonna generate. I would say, you know, just as an estimate, that it's about $100K a month, maybe more, a little bit more than that.

We don't know the total volumes that they're generating at this point because they've stockpiled. We don't know how linear it is to say that they're generating so much dry waste based on production levels versus just in hot commissioning. That should start here in mid-May. Then we have the TRU waste that we've been getting from the onsite contractor for many years. We are increasing capacity there in an effort to get to double throughput. We have our top management team out there as we speak, working with them, adding additional shifts and capacity. We should begin training additional personnel in March and April to be able to expand that.

We see that increasing, again, by this past mid-April. All four of those, actually it's five, are underway, and they're rolling. We do expect these numbers to increase once DFLAW gets to operational phases. That will be, hopefully, in the next quarter or two.

Okay. Understood. Thanks for the color there. Then, I mean, just kind of stepping back broadly, you've kind of talked over the years, I think DFLAW, you know, potentially $70 million plus of kind of revenue and, you know, I think lately it's been $3 million-$6 million a quarter. Is that ramped? It kind of sounds like in the fall, you know, that sort of a timeline and is that opportunity still, you know, largely how you're thinking about it?

It is. It's, you know, DOE's estimate. They haven't come off that estimate. In fact, several managers we've talked to have said that they've generating more filters than expected. The EMF waste I mentioned was significantly more than anticipated. There's a lot of other waste streams that also to be addressed, which we don't have any clarity on at this point. As I said, we just met with DOE last week. DFLAW was operational last week. It comes up and shuts down as they test each smelter out. They're still having problems with, from what I understand, with the feed system or emission system and tweaking those, getting them to design spec, performance levels.

They're working through it. I think the important thing, Aaron, is the DOE is very dedicated to the success of that project. They're more and more optimistic every time we talk to them about its ability to perform. They're working through the kinks and are optimistic that it'll be up and running soon at a higher level than it has been so far. A lot of upside there. The other important talking point on that, Aaron, is that DOE places Hanford among their highest priorities for this administration. It's very evident by the attention that the DOE headquarters gives to the site. They were out there last week.

We had a chance to meet with them. The local officials are all very action-oriented. They're plowing through hurdles and very focused on increasing the amount of tank closures they can have during this administration. They're getting creative on any way they can possibly begin to show retrieval of tanks during this administration as fast as they possibly can within, you know, compliance and safety standards. We're encouraged by that and very optimistic that, like I said, with this EMF hurdle that we had, they work through it and keep things moving.

While it may be a delay here and there, they are very sustainable waste streams, and we're very well positioned with our facility there.

Thank you for the color on that. Then, you know, maybe just on that, you know, commitment from the DOE and just focus on increasing tank closures. On grouting, you know, you've kind of talked in the past about that maybe being like a $40 million plus opportunity for you. But I see the kind of commentary on potential supplemental volumes from DFLAW, and it sounds like maybe a little more kind of support of kind of treating that waste in state versus shipping out of state and again, kind of treating more kind of sooner rather than later. Can you just kind of broadly kind of give us an update there? Is that, you know, kind of size still somewhat reasonable or just maybe an update there would be great.

Yeah. As you know, there's really 2 grouting programs. One is the West Side grouting program, which is, you know, been part of the Tri-Party Agreement, where DOE and the other parties, the regulators, agreed to do 22 tanks by 2040. That's to move forward with the design and installation of the infrastructure systems there on the west side. The procurement that we responded to, as I mentioned in the last call, was a $4 billion contract for grouting about 50 million gallons of that waste over that period of time. That RFP specifically said to be ready, the requirements were, that the bidders need to be ready to start receiving waste on the west side in January 2028, so about 18 months from now.

We're ready to go on that right now. We proposed in our proposal that we would do a contract mod or, excuse me, a permit mod, and install some additional equipment and infrastructure to be able to provide over 4 million gallons a year capacity to support that objective. That's on track. We should see here an award announcement hopefully before the next earnings call in July. Based on our discussions with DOE, we remain extremely optimistic that we have the lowest risk, best value approach.

We've focused on, you know, the fact that we have a local union representation at our plant and offer something that no one else can offer right now, which is the ability to grout locally and ship by rail out of state for commercial disposal. That is a very much preferred transportation alternative rather than shipping very large quantities of untreated radioactive liquids out of state. Which is done all the time, and we do it too, so it's not like it's unheard of, but these are very large quantities, and we're confident that DOE will recognize that we offer a lower risk approach by, like, grouting locally and transporting by rail.

The other component of grouting, to answer your question, was the east side. Basically, the east side is what feeds DF-LAW. DOE is working towards ways to consider grouting on the east side. I don't want to speak for DOE on where they are on that process, but they are working to make sure that they're closing tanks as fast as possible. Again, with DF-LAW as the cornerstone of their strategy, grouting is supplemental to that. They do have a tank full of about 1 million gallons, 800,000 gallons of pre-treated waste that will go to DF-LAW that they could potentially begin to grout, and I know they're looking into that.

We're hopeful that in the next 6-12 months, they'll be able to work out with the regulators a way to begin grouting that as a supplement to DF-LAW so they can begin to close more tanks under this administration. Those two components together are making progress. Hopefully we'll see something, you know, sooner than later, like this year, on grouting, but there is a complicated regulatory framework they have to work through to be able to do that on the east side. I know they're spending a lot of time and resources to focus on that.

Great. Thanks for all the color on that. Appreciate it. Then, you know, on services, I heard, you know, Enterprise, it sounds like that might be back in play. Can you just kinda remind you know folks on the timing and potential size of that? Then just kinda second on that, you kinda highlighted the more services opportunities you see, kind of the more opportunities potentially for the rest of the business. Can you just elaborate on that a little bit more, please?

Sure. You know, we're pretty excited about the Enterprise. Just to kind of give you a little background, it was awarded last May to a company that we were not a subcontractor to. There was a protest. The protest, you know, went through the winter, and in the March timeframe, it was determined that the protest should be upheld, and that the Navy needed to come back out with their RFP in consideration of the corrective actions associated with that protest. It did, and what they call a final proposal revision or they call FPIR. There was a turnaround on that. These proposals were resubmitted April 24th, and the Navy is anticipating an award sometime in June.

Again, it was documented as three bidders on that. We're very excited about our team and our position with that. We are a subcontractor to one of the team, the primes, but have very significant scope. It's directly, you know, squarely in our core competency for decontamination, decommissioning of a ship, and using our health physics expertise along with our waste management folks to provide support to that team. Hopefully we'll be talking about an award there again in this competition, but we'll hopefully hear an announcement here before the end of this quarter.

Great. And then just one last one, if I could sneak it in. Just on margins, you know, with all these opportunities and kinda incremental volumes set to start later this year and into next year, how do you think about incremental, you know, margins as some of these opportunities come on and, you know, especially up in the Richland plant?

Our Richland facility, you know, is everything we do there is designed in regards to how we bid and how we price to maintain our margin targets that we've had for quite some time, which we've talked to investors about in the past. I can't get into the numbers now on the call, but they're within the margin targets we maintain regularly. We expect those to continue. On the services side of the house, it's, you know, it's a much less margin, much lower incremental margin overall on our bids. We have gotten aggressive recently on some of them, and where the risk would allow us to.

We don't take undue risks on things like fixed price tasks or projects, but you know, on cost plus, which are lower risk, we can be more aggressive. All I could say in regards to margin overall, to answer your question, Aaron, is that the technology we've been deploying both for PFAS as well as Hanford and our other sites are all within or very close to the target margins we have for the rest of our waste treatment program.

Understood. Thank you for taking all of our questions. I'll turn it over.

All right. Thanks, Aaron.

Thank you. As a reminder, ladies and gentlemen, if you have any questions, please press star one on your telephone keypad. Our next question is coming from Howard Brous with Wellington Shields. Your line is live.

Thank you. Excuse my voice. In terms of the timeframe for grouting and the volumes, can you be a little bit more specific in both?

Sure, Howard. For the east side, you know, I think that if we had to speculate, and this is speculation, Howard, that you know, if we were able to secure 300,000 gallons in the next 12 months, we'd be pretty excited about that. That's kind of our target. DOE hasn't given us a number, but we know what they're looking at doing. It also depends on DFLAW. If DFLAW gets up and running quickly, and they ramp up production, they'll be draining that storage tank a lot faster. Right now, the storage tank's kind of remaining idle, and they want to start feeding it again with pre-treated waste.

There's an opportunity for them to grout some of that existing storage. Again, 300,000 by the end of the year would be a great target for us. Again, I am not speaking for DOE on this, but just an estimate for where we'd hope to see. On the west side, we really are not certain of what kind of ramp up DOE is considering relative to the requirement for January of 2028 and getting started on grouting. We do know that the design capacity for the west side extraction system is right around 3 million gallons a year. It may be expandable.

I know that DOE leadership has said in several public hearings and meetings that their goal is to exceed 3 million a year and get closer to 6. That's possible through a couple different approaches that would include more from the east side and west side. Right now, 3 million is kind of the target goal for what they plan to grout on an annual basis sometime after January of 2028, which would likely be a year or so after that.

Our goal has always been to make sure we get at least half of it and provide DOE with a best possible cost and lowest risk, as I mentioned, opportunity to make sure we get half and you know become a long-term sustainable waste stream for us and someone that DOE can rely on to provide a significant portion of the production they need to close those tanks.

Thank you. Just one more. The Enterprise. Can you give us some details as to how meaningful this will be, when it starts, and how long it'll take, revenue, et cetera?

Yeah. I can't talk about the procurement at all, Howard, but I can say that the government estimate for the project was between $500 million-$800 million. There was a requirement, I believe it was 4 years, to have it done in 4 years, Howard. May have been 4-5 years, but I think it was 4 years it was supposed to be done. The Navy was gonna be intimately involved in it to oversee what's going on. It's gonna be done on a commercial site, which is very unusual for the Navy to do that for a nuclear ship. They do it for non-nuclears all the time.

Then that ship will go to scrap, so it has to be decontaminated, and then torn apart, for scrap. There's quite a bit of decontamination to be done. There's eight reactors on the ship, and that's where we come in. We were the primary small business on the team, and there was a significant small business requirement in the contract or in the RFP. We expect to be able to grow that. We can't get into how much it would mean for us initially until the award's made, Howard, but it's between 20% and 30% is the small business goals for that, I believe, in the RFP.

20%-30% of which number?

Well, the government estimate, all I can say is, between $500 million and $800 million.

Thank you. That is all I have.

Okay. Thanks, Howard.

Thank you.

Thank you. Our next question is coming from Bernard Vivalla, who is a private investor. Your line is live.

Hi. Good morning, and thank you for taking the question. I actually asked you in a specific way at the Gabelli meeting, this particular avenue, and today I'll ask in a more general sense, but Perma-Fix seems to be, to me, to be uniquely permitted to process the radiological material that will be generated by rare earth refining. I just wanna ask you, am I just kind of going off in the wrong direction on that? Or is that something the company has explored or is thinking about? Thank you for a response.

Well, I mentioned it, I think it was the last quarter, maybe the quarter before that we were participating on a procurement for mining, including rare earths and uranium. We were able to secure that contract. It was our first contract of that nature where we're actually sorting through our sorting technology for a product as opposed to defined waste. That project is going into the field here, I believe next month in June, with our sorting technology. We're very excited about it. I can't. You know, it's a confidential client.

We really can't talk about who it is or what it is, but it is in the mining industry. We're excited about the opportunity to use the sorter in the mining industry itself. It's a large company, with lots of other mines, so this is an important precedent for us. We're hoping we can parlay this into a more broader application in the mining industry.

I appreciate that. I would just encourage to the extent you can, as you go forward to shine a little bit of light on that. I think it would do a lot of good. Thank you so much.

I appreciate that. You bet. Thank you.

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

Good morning, everybody.

Morning, Steve.

Hi. My first question is, how have you been impacted by the energy situation of the world?

You know, it's a very interesting question, Steve. Where we've been impacted, I don't know if the investors on the call here have followed DOE a lot in regards to their reindustrialization mission. Where they've been hugely successful in reindustrialization at three of their primary properties, the Paducah site in Kentucky, the Portsmouth site in Ohio, and here in Oak Ridge. What they've done is really reignited the nuclear market itself from fuel fabrication to all types of different energy S-SMRs and other energy-related initiatives for those sites. We've worked pretty hard to try to get involved in that.

At this point, it's in early stages, as DOE loans have gone out at about $900 million to three different companies. But also in the fuel fabrication and other components of that industry, we've been able to provide some support in due diligence of the properties as well as in waste management. But the one we're particularly excited about is up at Portsmouth. Portsmouth had a huge press release a few weeks ago that SoftBank has worked with DOE headquarters and Commerce Department as well for a big initiative up there to implement a 10-gigawatt natural gas capability to support one of the what they say is the world's largest data center there at the Portsmouth site.

We fortunately have a contract there now. We're working with them on accelerating some of the cleanup there, that's growing very well for us. It just got started here a couple of weeks ago. We're very excited about that. To answer your question, most of the energy reindustrialization part of it that we've been able to support is in DOE-related types of initiatives. We are seeing good growth there and acceleration at those sites, all the sites as they prepare the properties for transition to commercial activities from the DOE activities. We're seeing opportunities for accelerated waste management needs in getting the waste off-site, particularly some difficult waste, and accelerated closure for those as well.

Okay. My understanding is that the vitrification plant or DFLAW, you know, whatever, you know, that process in Hanford uses diesel. Is that still using diesel?

I believe it is, Steven.

Isn't that, you know, we hear the stories about how they're getting impacted on the West Coast? Doesn't that, you know, impact the story there relative to the efficacy of the process there?

Well, I can't speak to that, Steve. I can say that, you know, the plant's been in design and construction for over 27 years. I think they kind of, you know, made the investment in that facility the way it is. I wouldn't expect that to change any. They are expanding its capacity to get up to the 2 million gallons a year level for production. I don't know if they have any thoughts at all on alternative energy sources for heating those melters.

All right. When you say they're moving to getting up to 2 million, what type of efficiency would that be?

I wouldn't be able to answer that.

You know, in other words, like, would that be 35? Would that be 35, 40%? Would they be increasing their efficiency from the historical efficiencies of You know, vitrification, which is in the 30-40 range, you know, 40 range, 40% range.

I'm afraid, Steven, I just don't know enough about the DFLAW to be able to answer that question.

Okay. All right. What does EMF mean?

I. The acronym escapes me. You know, we've talked about the acronym so many times. It's an, it's an effluent. Basically, what it is the blow-down water for the emissions program. So it basically is scrubber water. The acronym itself, I don't know if Ben or Karen you know off the top of your head, you can help me with that. Ben, you got it?

Effluent Management Facility

Okay

Facility.

Yeah.

Effluent Management Facility.

The EMF is a facility that receives the blow-down water from DF-LAW.

Okay.

They concentrate it, and we get it from them.

Got it. Okay. So that's. Anything you got from DFLAW would come from EMF? That's just one type?

That's one waste stream, correct.

Okay. All right. When what I don't follow is, if they're still in transition in out there, why wouldn't they be giving you the tanks, you know, that are sitting there? 'Cause they can always make up more tanks, it would be at least something in progress.

Yeah. Steve, it's the way the government works is, you know, they make, they define plans far ahead of time, and they go through a lot of regulatory processes and agreements and public hearings to nail down their plans. When they want to change something, it takes a while to make changes in general. They are making changes along the way, as I mentioned, with the supplemental analysis for EMF, where they decided, "Hey, instead of putting the EMF back into the melters and making glass out of it, wouldn't it be better to ship it off for grouting and be able to increase the throughput of the plant?" That's a change.

Those types of things, they have to run through those considerations, including public comment, and it just takes a while. As far as the tanks go, you know, right now they're focused on getting the systems up and getting them operational, and there'll be other changes along the way, I'm sure, as they define efficiency opportunities.

All right. On the, what is it? The west side, that's where there's no piping?

Right.

That's the west side, right? Okay. Presuming you were awarded that contract, am I correct that the timelines between award and starting would be they have to set up structure there to be able to pull out of the tanks, and then at this is that the what the time is about between the awarding and then starting processing that they don't have an infrastructure to handle the tanks?

That's correct. They're building infrastructure as we speak, Steve.

Are we talking a similar separation process that's being done on the east side with the east side tanks, where they're separating, you know, low from high? Is that what the anticipation is there?

That's part of the design. That's exactly right. It's called the

Okay.

Right now, they have a call they call it the TSCR. The TSCR is doing that separation, as you mentioned, through ion exchange.

Right.

And, uh-

All right.

They'll have a much more bigger, larger, more robust system on the west side. They're building one on the east side too in parallel to supplement TSCR.

Okay. Which could be beneficial for you if they have more.

Yep. That's right. That's right.

Yeah. Okay. All right. From your standpoint, if you win, how long is it gonna take you to scale up your capacity?

We have committed to have our capacity if we receive an award in July. I'm glad you asked this. Let's just point out. We've already started working with the state to modify our permit. We've already had several meetings with them. It's going very well. We've already completed our design for the most part for installation of our new grouting equipment that we'll be purchasing. We'll have that in place, up and running. We've committed to DOE to have that 3 million or 4.2 million gallons of capacity within 18 months. We basically are committed to October of 2027 to be able to do 4.2 million gallons of waste once we receive more assuming that we receive an award in July.

That $4.2 million is what? Everything or just the west side?

That's their total capacity. That we may increase that as well. It's just kinda where we're targeting right now. It would be for whatever waste DOE wants to send us. Well, liquid waste specifically.

Okay. All right. Fine. This month, has there been an improvement in April?

We have seen improvement in April.

Do you know, Reverend?

Yeah.

Yeah. Like, in other words, we're reporting through March. Are you seeing a change in April, or are we still looking forward?

We've seen improvement in April. I can't get into details as far as April's numbers go.

Fine

We are seeing improvement, particularly with the ETF waste being received and working on some of the other waste we've got. We see a significant increase in our forecast for the next 2 months that puts us in a position to that we will see a significant improvement over Q1 for sure.

Okay, good. What's going on with the European stuff?

Uh, the-

You know, your plan with-

The NRC contract we have is going very well. They started remediation of drums in April. It's going a little slower than they thought once they started pulling drums out of the ground. Those are the drums they'll be sending to us to vitrify or excuse me, to burn at our Northwest plant. We continue to receive waste from Mexico and Germany, as well as Canada. The big contract in Italy is rolling. It was significantly ahead of schedule. It's probably back to close to original schedule now, 'cause as they're pulling drums out of the ground that it's going a little slower than they thought. Again, that's not our scope.

Our scope is to take the drums they pull out of the ground, characterize them, and then ship them over to Northwest and treat them. It looks like it's still on track for Q1 of 2027 for the first ship. Once those begin, it'll be in the range of $6 million-$7 million a year of sustainable waste streams.

All right.

For five years.

changing the subject again. You mentioned mining, which, that's the first I really Well, I've heard of that, but I'm very aware of what's going on with rare, you know, rare earths and stuff like that. What do you actually pull out of it when you, when you do it? Are you just cleaning the waste, or you actually pulling out something of value?

Our

You know-

focuses on, it's very simple, Steve. It focuses on segregation of radioactive components. We can load a load of soil into our system, which is a large conveyor system. Goes into a hopper and goes down on a conveyor belt at a very rapid pace, like 200 yards an hour. Moves up the conveyor belt, and our detection technologies can separate the radiological components from the soil or debris at a very rapid and very accurate pace, so that you can concentrate the radioactive component. Or in a remediation situation, you remove the good soil so you can reduce your waste volumes.

In a mining application, you're segregating your radioactive component for processing and reducing your waste component and concentrating your source. That's generally what we do.

That's unprecedented?

It's not unprecedented, but the technology we have is advanced. We don't know of anyone else that can do this, the way we're doing it. You know, it's largely a software application, with the detection systems. We have a very skilled, couple of teams that run this unit, very efficiently and inexpensively, relatively. It's very high value. We haven't seen anybody else competing with us. There's other soil sorters out there, but not with the similar type of software technology and detection systems that we've got.

All right. My understanding of rare earth is that the real challenge there is the ability to refine. What you're doing is before they start refining?

Right. That we're.

Okay

at the mine site, concentrating the source material that they're looking for.

So, so in that sense, your-

Again, this is just radioactive components at this point.

Right. Your success makes the refining easier, in essence.

Right.

Correct?

More efficient. More efficient, correct.

In theory. All right.

Yeah.

Turning to PFAS. What's happening with the arrangement you made with that non-PFAS fire company in Atlanta? You know, that provides non-PFAS product.

Right. We're working with them on several change outs right now, along with several other companies. That's where we're seeing a lot of our larger revenue streams coming in, as I mentioned, with airports, where we're proposing on several airports. We've just recently won one in Arizona. We're working with several different companies, that's one of them, to replace the PFAS firefighting foam out of the airports and putting in new stuff, new foam, that doesn't have PFAS in it.

So, so-

That's one of our more exciting programs we're doing right now, contributing to our backlog.

Right. That I don't think, at least I'd from earnings call, didn't understand this until someone told me, but basically Am I correct that your connection with this company, that basically their fire systems are, they have huge tanks, they're replacing huge tanks of the foam. Is that correct?

That's correct.

Okay. Good. All right. Then the last question regarding PFAS is the fact that the present EPA stopped the total ability of companies to use to have to deal with their PFAS situation, how does that impact you?

Yeah, it doesn't help, what has helped is the states are promulgating their own policies and rules. Several states have taken steps in that direction. I believe there's 12 of them. It would be optimal if this administration would promulgate some policies and designate as a hazardous waste, like under a circular or something like that would require accountability for managing their PFAS on site and reporting on it and being enforced. That hasn't happened yet. We do think it'll happen eventually, we'll be ready when it does, 'cause that will change the whole market overnight.

Right now it's being driven largely by states, and best management practices relative to liabilities, for people getting contaminated with PFAS, and industry recognizing the importance of removing PFAS from their facilities.

All right. Well, keep on trucking. It's, you know, the number of opportunities I've never seen here. And anyway, thank you.

Okay. Thank you, Steven.

Thank you. Ladies and gentlemen, as we have reached the end of our Q&A session, I would like to turn the call back over to management for any closing remarks.

All right. Thank you, operator, and thank you to everyone who joined us today on the call. I wanna close by reinforcing the main message from this morning's call. While the first quarter was challenging, we view it as a transitional period that help position Perma-Fix for a stronger activity beginning in the second quarter. We took deliberate steps to reduce existing waste inventories, prepare our facilities for higher waste receipts, complete lower margin work, and invest in the personnel training and infrastructure needed to support the opportunities that are now developing across the business. More importantly, we believe the Hanford opportunity is beginning to move from preparation towards execution. ETF waste receipts have started.

We continue to work with DOE contractors in addition, and for additional DFLAW waste related waste streams, and our Perma-Fix Northwest facility is well-positioned to support multiple Hanford related programs over time. At the same time, we're seeing renewed momentum in nuclear services, including the mobilization of our $24 million Livermore contract and continued progress with PFAS destruction, including our new wins in installation of our second-generation treatment unit. Taken together, we believe Perma-Fix is entering a strong phase. The investments we've made over the past several years in permitting technology, people, facilities, and customer relationships were designed to prepare us for this opportunity set.

While timing may vary quarter to quarter, we believe the direction of the business has improved materially, and we're increasingly confident in our ability to improve performance beginning in Q2, through the balance of 2026 and over the longer term as these opportunities begin to scale. We appreciate the continued support of our shareholders, our employees, the customers, and partners, and we look forward to updating you on our progress in the coming quarters. Thank you.

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

Good morning, everyone, and welcome to the Perma-Fix Fourth Quarter and Fiscal 2025 Business Update Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the call over to your host, David Waldman of Crescendo Communications. David, the floor is yours.

Thank you, Jenny. Good morning, everyone, and welcome to Perma-Fix Environmental Services Fourth Quarter and Year-end 2025 Conference Call. On the call with us this morning is Mark Duff, President and CEO; Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing fourth quarter and 2025 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call other than statements of historical 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 morning's press release. 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 non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.

All right. Thanks, David, and good morning, everyone, and thank you for joining us today. 2025 was an important year for Perma-Fix as we focused on strengthening our operational foundation and positioning the company for the next phase of growth tied to the Department of Energy's Hanford cleanup mission. For the full year, revenue totaled approximately $61.7 million, reflecting stronger performance in our Treatment segment and improving waste volumes across several of our treatment facilities. While the timing of certain government programs affected activity levels during the year, we made significant progress preparing our facilities, workforce and infrastructure to support the increased waste volumes expected as the Direct Feed Low-Activity Waste or DFLAW, program transitions into its operational phase. Throughout the year, we also made targeted investments in personnel, infrastructure and plant capabilities to ensure we're fully prepared to support the next phase of activity at Hanford and across other DOE cleanup programs. As many of you know, the DFLAW program and the Hanford tank waste program represents one of the most significant environmental remediation efforts currently underway in the United States, and we believe Perma-Fix is uniquely positioned to support this mission, given our specialized treatment capabilities and our long history of supporting DOE waste management programs. One of the most significant milestones in the year was the renewal of the permit for our Perma-Fix Northwest facility. This permit significantly expands our permitted processing capacity to approximately 1.2 million gallons of liquid mixed waste annually, effectively tripling our liquid processing capacity and also authorizes treatment of up to 175,000 tons of waste through macro encapsulation annually. Combined with our investments in automation, facility upgrades and workforce expansion, these improvements meaningfully strengthen the role Perma-Fix Northwest can play in support of multiple Hanford-related waste streams and other DOE emission objectives as activity ramps in the coming quarters. In the recent press release, DOE announced the need to extend the DFLAW hot commissioning phase. However, waste is expected to be received through the DFLAW liquid waste treatment processes beginning in May at our Northwest facility with dry waste expected to be received in April. The liquid waste streams are -- anticipated waste streams are expected to grow above original estimates by as much as 20% as described by DOE based on changes made and the process flow, which will include grouting a portion of the effluent waste instead of using DFLAW vitrification processes as originally designed. Our regulatory supplemental analysis is under review that includes using Perma-Fix Northwest grouting capacity, to treat the affluent to enhance production levels at the DFLAW facility. The DFLAW facility has processed about 50,000 gallons of tank waste through February and the melters remain hot which produces steam resulting in generation of waste to be included as affluent to Perma-Fix Northwest. For investors trying to better frame the timing of the DFLAW opportunity, DOE planning documents indicate the system is expected to ramp progressively through hot commissioning, beginning -- which began in October of of 2025. And within 12 to 18 months of that start date debut plans to reach operational phase at approximately 40% capacity before increasing towards 80% capacity as additional systems come online and that's required to be done within 3 years based on the tri-party agreement at Hanford. We view this as an important indicator of the size and durability of the opportunity in front of us, while also recognizing the exact pace of that ramp remains completely dependent on DOE execution and site operating conditions. Initial estimates regarding revenue potentials remain at about $1 million to $2 million per month beginning in Q2 and ramping up through the year. At a recent Waste Management Conference in March, DOE leadership specifically addressed the importance of implementing a grouting program to supplement DFLAW towards meeting the department's goals for diving tank closures by 2040. DOE stated that this program is working towards treating up to 200 million gallons of waste by 2040 from the Hanford tanks through the DFLAW program and supplemented by the Grouting program to be initiated in 2026. The number has grown from the original 56 million gallons estimated based on the expectations due to the fact that they will be generating 1 to 3 gallons of wastewater from each gallon retrieved due to the need to add liquids to the tank to retrieve the waste. Over the past several months, Perma-Fix Northwest has continued to make significant investments in automation and information systems of personnel training to ensure the facility can operate efficiently at high throughput levels and meet or exceed expected production rates as a broader range of waste streams begin to arrive. The Hanford remediation programs are expected to generate sustainable waste streams over time, which we believe can create consistent long-term treatment demand and recurring activity for our facilities. In addition to supporting DFLAW program, we expect to participate in several other Hanford related waste streams and site programs that will generate additional treatment demand over time. These increases in receipts include providing solidification, treatment support to high-volume contaminated water from the Hanford site as well as increasing our Transuranic Waste Processing program by 100% beginning this month, supported by additional shifts at the Perma-Fix Northwest facility. As waste receipts increase, we expect to utilize the expanded capacity to support a growing volume of treatment activity tied to both Hanford Mission and other DOE programs. Operationally, our Treatment segments delivered meaningful improvement during the year. We saw higher waste volumes, improved plant throughput and stronger waste mix, which together drove significant year-over-year growth in treatment revenue. As a result, treatment revenue increased approximately 29% year-over-year, reflecting both higher activity levels and stronger pricing dynamics associated with the waste streams we processed. Importantly, our treatment backlog increased by approximately 51% year-over-year and approximately -- to approximately $1.9 million in revenue, providing improved visibility as we enter 2026. This backlog growth reflects increasing demand for our specialized treatment capabilities across both government and commercial waste streams. Another area of progress during the year was international activity. Revenue from foreign entities increased approximately 163% year-over-year to approximately $6.4 million, reflecting growing global demand for our specialized waste treatment services. Our international markets continue to represent an attractive growth opportunity for us as many countries face similar challenges related to complex nuclear and hazardous waste management and we continue to see an expanding pipeline of potential treatment projects in Canada and other international markets. Turning to productivity more broadly. We have seen a number of encouraging developments over the past several months that we believe support our growth outlook for 2026. These include opportunities tied to Soil Sorting, work for a commercial uranium mining client, additional treatment work related to Canada and other international markets, our weapons production-related waste treatment programs and remediation work supporting a major university laboratory environment. Some of these opportunities are already moving into execution, while others remain in final [indiscernible] and start-up phases and together, they reinforce our confidence in improving activity as we move through the year. We also want to set expectations appropriately for the first quarter. While Perma-Fix does not typically provide formal guidance, it's important to recognize that factors are expected to make the first quarter softer than the stronger activity we tend to expect to begin for the second quarter. These factors include recent delays in the DFLAW affluent receipts, which shifted expected waste receipts out by several months, also normal seasonal weaknesses in field activity during January and February and ongoing efforts at Perma-Fix Northwest to process stored waste and prepare all -- to prepare all of our resources for the increase in Hanford-related activity expected later in the coming months. While the Q1 numbers are not finalized, losses in Q1 will likely exceed $4 million in negative EBITDA on about $13 million in revenue. Despite those near-term impacts, we've seen strong activity in March and I believe the second quarter should represent an inflection point as additional waste receipts and project activity begin to ramp. The focus on stored waste, I mentioned has resulted in timing-related shift in revenues from Q1 to Q2 due to applicable revenue recognition rules, resulting in a movement of approximately $2 million in revenue generated at Perma-Fix Northwest to be recognized in Q2, while they're actually processed in Q1. We also continued advancing the development and commercialization of our PFAS destruction technology. During the quarter, our engineering team focused on completing construction and installation of our new generation 2.0 PFAS Destruction System at our Oak Ridge facility, the upgrade system -- the upgraded system is designed to increase our PFAS destruction capacity by up to 3x our current rate, while incorporating engineering improvements intended to reduce operating costs and improve reliability and production rates. PFAS continues -- PFAS contamination continues to receive increasing regulatory and environmental attention worldwide, and we believe technology is capable of permanently destroying these compounds will play an important role in the future of remediation efforts. We also continue to see strong interest in our technology as an alternative to incineration with our PFAS Perma-FAS system, providing permanent destruction of PFAS compounds at a lower total cost, while affording air emissions. We believe the ability to permanently destroy PFAS compounds and eliminate long-term environmental liability represents a compelling advantage for our customers evaluating alternatives, traditional -- to traditional disposal methods. Over the past several months, we've secured several field projects supporting PFAS remediation at regional airports and continue to see additional airport-related opportunities currently moving through procurement processes. More broadly, we're continuing to develop strategic relationships with companies involved in PFAS remediation and AFFF removal as we work to expand the deployment of our technology across both government and commercial markets. Taken together, we believe these developments position our PFAS platform to support increasing demand for cost-effective permanent PFAS destruction solutions as remediation activities continue to expand. In our Services segment, revenue declined during the year, primarily due to the timing of project mobilizations and procurement cycles, including delays earlier in the year associated with the transition to the new administration and related policy adjustments. The partial federal government shutdown in October also impacted procurement for timing of government-related customers. In addition, we've seen the normal seasonal timing efforts of weather and delayed project mobilization is during the first quarter. Importantly, our Services business remains project-based and therefore, quarterly activity levels can vary depending on project timing and scope. Nevertheless, we continue to see opportunities in this segment tied to nuclear services, decommissioning work and government remediation programs, and we believe the progress we've made during the year positions us well as activity levels increase. In fact, I'm pleased to report we've won over $30 million in new Services backlog and submitted over $40 million in new bids just during Q1. We look forward to providing further updates on our bid pipeline in the future. Finally, I want to highlight what we believe is one of the most significant long-term opportunities in front of the company. In December, the Hanford tank contractor issued an RFP tied to the tri-party agreement to retrieve 22 tanks over approximately the next 12 years for commercial grouting and offsite disposition of the waste as part of a long-term remediation effort tied to the retrieval and stabilization of tank waste at the Hanford site. The RFP estimated that this contract will begin in January '28 for total -- for a volume of tank waste up to 50 million gallons to be grouted at commercial facilities. Perma-Fix Northwest is exceptionally well positioned for this opportunity given its location within the mile of the Hanford site as currently permitting -- its current permitting profile and its expanding processing capability currently available. While this opportunity is not expected to begin until later in the development cycle, we believe it underscores the scale of the long-term duration of Hanford-related work and is now taking shape and the strategic advantage Perma-Fix can provide and is recognized by DOE. So when we step back and look at the broader picture, we see the recent delays in DFLAW effluent receipts from hot commissioning activities as relatively modest in relation to the size of the opportunities in front of us. Between the DFLAW ramp, additional Hanford related-waste streams, the grouting program now in development for up to 200 million gallons of waste to be treated, expanding international work, a growing treatment backlog and advancing PFAS and remediation opportunities, we believe the opportunity for Perma-Fix to deliver meaningful growth and improved profitability beginning in the second quarter and continuing into the coming years has never been stronger. Thank you, and I'll now turn the call over to Ben for the financial discussion.

Thank you, Mark. Beginning with revenue, our total revenue from the continuing operations in the Fourth Quarter was $15.7 million compared to last year's fourth quarter of $14.7 million, an increase of $1 million or 6.9%. Our Treatment segment revenue increased by $2.6 million, while Services segment was down $1.6 million. In the Treatment segment, the increase was a result of higher volume, offset by lower average price, which was the result of a change in waste mix. Reduction in the Services segment revenue was due to lower start-up of new projects to replace completed projects from prior year. For the year ended 2025, our revenue was $61.7 million compared to $59.1 million in 2024, an increase of $2.6 million or 4.3%. In the Treatment segment, revenue was up $10.1 million, while the Service segment dropped by $7.6 million. As with the quarter, the Treatment segment benefited from increased volume and it also had higher average pricing related to waste mix. The Services segment continued to feel the effects of reduced project work related to timing of project start-ups and awards. Turning to our gross profit. For the fourth quarter, gross profit was $1.2 million compared to $594,000 in Q4 2024. Gross profit in the Treatment segment increased by $983,000 as a result of increased revenue, offset by higher labor and maintenance expense. Services segment gross profit was below prior year by $365,000 due to lower revenue and lower margin projects. However, that was offset, partially, by reduced fixed overhead costs. For the year ended 2025, gross profit was up by $6 million. Most of the improvement came from the Treatment segment where higher revenue and improved margins were partially offset by the increase in fixed cost at the plants. Gross profit from the Services segment was relatively flat as the impact of lower revenue was offset by drops in both variable expenses and drops in fixed overhead. Our total SG&A costs for the fourth quarter were $4.2 million compared to $3.9 million in the fourth quarter last year, while SG&A for the full year was $16.4 million compared to -- in 2025 compared to $14.4 million in 2024. Our SG&A expenses in the quarter were up from higher marketing costs related to payroll and trade shows, while administrative expenses increased due to payroll and legal expenses. Our SG&A costs for the fiscal year 2025 were up by $1.9 million from higher payroll expenses in both marketing and admin as well as higher trade show and legal expenses. Our net loss for the quarter was $5.7 million compared to last year's net loss of $3.5 million. Note that the current year results include an adjustment to one of the company's discontinued operations of $2.7 million related to a long-term remediation cleanup. For the year ended December 2025, net loss was $13.8 million compared to a net loss of $20 million in the prior year. Again, our net loss for 2025 included the $2.7 million recorded in the remediation reserve for our discontinued operations, as previously discussed. And note also that in 2024, our net loss included approximately $8.2 million of income tax expense related to the full valuation allowance established on our U.S. tax deferred tax assets. Our basic and diluted net loss per share for the quarter was $0.31 compared to a loss per share of 22% in the prior year. This includes the impact of $0.15 per share from the adjustment to the remediation reserve within our discontinued operations. Loss per share for the year ended December 31 was $0.75 per share compared to a loss per share of $1.33 per share in 2024. EBITDA from continuing operations, as we described in this morning's press release, was a loss of $2.7 million compared to a loss of $3 million last year. For the year ended 2025 EBITDA was a loss of $9.7 million compared to a loss of $13.8 million in 2024. Turning to balance sheet in comparison to 2024. Cash on the balance sheet was $11.8 million compared to $29 million in the year ended 2024. Unbilled receivables were higher in '25 compared to '24 by $3.8 million, primarily due to the timing of waste shipments in the Treatment segment. Our net property and equipment was up $3.5 million, primarily from capital spending which included the construction of our PFAS reactors. Intangibles and other assets were up $1.4 million from interest earned on the finite risk sinking fund as well as increase to permits and joint venture investments. Our waste treatment backlog for the year-end was $11.9 million compared to $7.9 million in the prior year. Long-term liabilities related to discontinued ops were up $2.7 million, again, due to the increase in the remediation liability at one of our [indiscernible] discussed facility. Total debt at quarter end was $2 million, excluding debt issuance costs, which is mostly owed to PNC Bank. Finally, I'll summarize our cash flow activity, cash used by continuing operations was $10.3 million, cash used by discontinued operations, of $441,000. Cash used for investing in continuing operations was $4.9 million, primarily for cap spending and permits. Cash used for investing of discontinued ops was $54,000. And cash used for financing was $981,000 representing monthly payments to our term and capital loans of $631,000, payments related to finance lease and other debt of $327,000. The payment of offering costs from last year's equity raise of $195,000 and offset by net proceeds from option exercises of $172,000. With that, operator, I'll now turn the call over for questions.

[Operator Instructions] Our first question is coming from Howard Brous of Wellington Shields.

I just have a couple of quick questions. You started talking about Q2 and the performance. Can you give us a better sense of what you're referring to?

Sure, Howard. Yes, we have a lot of confidence in Q2, Howard, based on a couple of things. One is, as you know, it's really been about 2.5 years since our Services Group has really established a strong backlog of projects. And for numerous different reasons, a lot of it was just a cyclical thing with the changing of contractors at the prime levels and other market conditions. But that's really changed significantly in the last several months, and we're excited about where the Services Group is going. First, we just received a new contract award for a demolition project for a radiological facility at a National Lab. We hope to be announcing that in details -- some details on that in the next few days. We've also mobilized 3 new projects into the field in the last 2 weeks that will generate waste that we'll receive in process. There's projects that have better margins than most. And we've also got a pretty significant backlog of -- probably I should say, pipeline of opportunities we've submitted bids on, with -- squarely within our core competencies for radiological facility demolition and remediation as well as decontamination. So those looked really good for the summer, and it puts services in -- back in a position of carrying more weight than it has. And that typically bolsters our treatment shop as well. But along with that, we're also -- the other component or why we believe Q2 will be better, is related to Northwest. Just a little more detail on Northwest. There's a project up there that includes taking all the surface water waste that Hanford accumulates in selling ponds on site. And the -- evaporate that and make a brine out of it and they sent us the brine. And that program will start up, as we plan to start April 1, and we'll start receiving waste a few days after that. That's about $1.5 million or so a month revenue stream that's very important to us, and that will go for an extended period of time. It's a very sustainable waste stream as a runoff and from rainfall as well as from groundwater treatment activities and those types of things all comes to us, and we treat it and send it back. Secondly, DFLAW, as I briefly mentioned in this somewhat complicated, but bottom line is that they're in high commissioning now and they're run -- they're still running waste through the facility in smaller quantities not at a sustainable level. But they do generate what they call blowdown water. That's the water they use in the scrubber systems to address their effluent requirements. That waste was going to be pumped back into DFLAW and make glass out of it. In a press release a couple of weeks ago, about a month ago, I do -- we said, instead of us making glass out of that blowdown water why don't we treat it, and then we can do more tank waste, 20% more. And so they work with us, and they're going to be shipping us that waste here as soon as their supplemental analysis gets through the public comment period, which is mid -- late April, and then we should start seeing that sometime in May. So that should also be an additional waste stream from DFLAW along with some dry waste from processing. And lastly, the TRU waste program, as I mentioned, has doubled in size. So going from 1 shift to 2 shifts. That's added about $750,000 to $1 million a month as well. All this together, along with the $2 million I mentioned is going to be bumped from Q1 to Q2 due to revenue recognition rules. April looks like a great month and the Q2 altogether and Q3, looks like a very sustainable return back to profitability based on what we're seeing right now. So we're excited about Q2, Howard.

Going back to grouting. It seems that the -- excuse my voice, the 200 East area where the waste treatment plant is, they have a plan to grout the waste of the 200 West area. Can you comment about that?

Yes. It's important to understand there's 2 different components of the Hanford site. The West area is where there's -- the DFLAW does not have an infrastructure included. It's a distance, a good distance from the actual DFLAW plant. So as determined they're going to basically commercially grout all the tanks out there. And under the Trump administration, they're being very aggressive about it. And that's what the large RFP I mentioned in my script is all about. It's basically a $4 billion estimated value. There's a lot of flexibility in it. In other words, they may use other contract vehicles that may make multiple awards. But the bottom line is they're set up to really begin high-volume grouting at about the 3 million to 4 million-gallon a year range, but it does expand a little beyond that in the next 2 to 4 years. And we're in a great position for that being the only local facility local. And I'm sure they want backups to us or maybe supplementals to us. That remains to be awarded here sometime in the third quarter. But in parallel with that, the East side where DFLAW is, DOE has been somewhat vocal that instead of all the waste going to DFLAW that's currently being pumped into staging tanks to go to DFLAW, they can start grouting some of that waste. In other words, they have 1 million gallons of storage for DFLAW while that's sitting there, they could be pumping it out for grouting as well as probably get the DFLAW. So there's an opportunity for supplemental grouting to occur and we're in a really good position for that as well. And that's something we're looking at doing in the third quarter or fourth quarter if they get to the regulatory hurdles they're planning to. So both those components could start impacting us in the next 12 months and certainly in the next couple of years, but presents a very significant backlog opportunity for the company.

Last question, I want to address PFAS. In terms of volume and capacity, where are we headed?

Yes. With new systems have been delayed a couple of months due to supply chain issues, which we seem to be facing all the time. Everything is on site now. We're going through the installation process. We poured concrete and things are rolling. So we're really on track for late April, early May to start testing. And once that new system comes online, we'll be basically in a position to do about 3,000 gallons a day. And backlog has been pretty good at the Gen 1 system. We've made some improvements through the last quarter, 2 quarters, really, where we are able to start recycling our chemistry, and that allows us to lower our rates. As I mentioned before, our target is really to undercut incineration. We can do PFAS treatment cheaper than the incinerators can and that's been kind of the shift in the industry to total destruction. It's kind of our competition. So our sales focus is squarely right now on making sure we're getting as much incineration competitor waste as we possibly can. And it's going really well. And again, we continue to do a lot of partnering on that. And we believe once we get the capacity up to 3,000 gallons a day total capacity with the new system and the old system as well that we'll be able to get even greater backlog because we can store more and commit to higher our throughput. So that's really where we're going. We're still doing some R&D on the smaller components, smaller systems to be field deployed. Right now, we're really focused on the new system and getting it operationally ready and rolling.

[Operator Instructions] And our next question is coming from Aaron Spychalla of Craig Hallum.

Maybe first on DFLAW, can you just kind of speak to the visibility into that waste stream starting. You mentioned some solids in April and liquids in May. And it sounds like still expecting that $3 million to $6 million a quarter as that ramps. Maybe just kind of walk through that timeline as well.

Sure, Aaron. It's been difficult. DOE has not been real public on the operations of DFLAW overall other than it's operating. And so it's difficult to understand how much waste is going in. What the issues are they're dealing with to get to an operational phase. In other words, getting through their punch list to make everything -- make sure everything is working at capacity. So it's difficult to project it. But we do know that, that blowdown water, the EMF water I mentioned should be -- as soon as this supplement analysis is done to change the direction where it was originally tended ongoing. We should start to see that in -- at about 10,000 gallons a month and ramp to 4x that as operations gets underway. So that's an important waste stream for us. That's a big portion of the overall DFLAW waste incineration itself. Not all of it, probably not even half of it. And there's a lot of other waste that are being generated that are basically being stored with -- at the Bechtel facility that we expect to start receiving in April. We don't have a lot of clarity on that at this point, Aaron, in regards to volumes and that type of thing, what the overall impact will be. But we know between the 2, we should be, as I mentioned, in $1million, $1.5 million to $2 million a month here, particularly by mid-quarter of Q2. And the clarity on that, I think, will increase as they get through some of these punch list items. DOE is totally dedicated to getting this facility up and running as fast as safely possible. And so it's difficult to really nail down schedules on when the waste really beginning to flow like we anticipate it will.

Understood. And then maybe on international volumes, you kind of highlighted growth there in 2025. Just how are you thinking about the opportunities there as we look to 2026 and beyond?

Yes. We just wanted some work, Aaron, from Canada again to do some liquid treatment and at our Florida facility as well as the DSSI facility here in Oak Ridge. That's going to be a pretty good backlog. That will begin here mid-April and run pretty much through the summer and could be going longer than that. We've also got several other projects for different clients throughout Canada that would be likely to begin in Q3. The Mexico waste we did last year, there'll be another tranche of that out for bid here. It's already been out for bid. That won't likely get rolling probably until Q3 or Q4. And we continue to get strong waste from Germany, and that also is expected to be sustainable here through the latter part of the year. Then our TRC project is going very well in Italy. Unfortunately, even though it's ahead of schedule, actually, the remediation process is for pulling the is for pulling the drones out of the ground that will start here in April. So all the permits are done, all the paperwork is done and now it's actually a field work. That's not our scope. That's another company, another contract. And our scope will be to characterize as drums as come out, they come out and that won't start until Q3. And we'll start seeing any of that waste probably until Q1 of '27. So to answer your question, we probably won't see the same revenue levels as last year, but they'll be close, but probably 25%, 30% less than we saw last year with it ramping up in Q4 and have a stronger '27 of international waste.

All right. And then on the permit, the expanding the capacity with everything going on at Hanford, just maybe talk about -- you've made investments, but just how you're preparing to handle all the volumes there?

Yes, Aaron. We just submitted our proposal on that a few weeks ago, and we've been pretty vocal about what our capacity expectations are. Right now, as I mentioned, we can do 1.2 million gallons a year of liquids. And what we're proposing DOE is that we will be submitting a permit mod through that permit here in the next few weeks and that permit mod will include ramping that up to an additional 3 million gallons on top of that. So worth a total of 4.2 million gallons total capacity for liquid treatment. That will cover all the waste streams we're talking about, plus the 3 million or 4 million in grouting for the tanks. And that permit mod is expected to take 6 to 9 months to get through the system. And we will be beginning to install or modify our facility to support that as well with investments here beginning in the second half of the year to get to that level. So the big deal about that permit renewal is a lot of things that are important to it, but the one that's probably most important since it's approved, now we can do permit mods. While they were reviewing that permit application, renewal application. For the last 16 years, we couldn't do mods to it because they kept saying, if you want to do a mod, we're going to stall on you or put your renewal down and pick up your mods, so you won't get your renewal. Now we have a renewal, we can do mods, and they'll be quicker and more efficient because they're not that complicated and allows us to be flexible on these things and to implement some new technologies, expand our current capacities and those kinds of things. So we really feel like being at a capacity of 4.2 million gallons a year based on the fact that the new administration is looking at such a large volume of waste that we should be able to get pretty much full capacity in the future. I don't know when that will be, a lot of it depends on how fast they can get it out of the tanks. But our capacity is not going to be a critical path, and we'll be very aggressive on what we can produce and what we can treat based on our capability.

And then just maybe one last one on the balance sheet. Can you kind of talk about cash flow expectations? It sounds like there's some receivables at year end? And then just how you're thinking about CapEx and investments in '26, you kind of talked about some maybe in the back half.

Aaron, yes, the balance sheet, we still have a number of capital initiatives to support the increased productivity expected. And -- but our working capital remains in good shape. We don't normally comment on any kind of cash raises at this time. So right now, we're comfortable with our balance sheet at 12/31, and we will evaluate that as the opportunities and the capital needs come above.

Our next question is coming from Walter Schenker of MAZ Partners.

Just to get back to PFAS. So the original unit is -- it's a question, is operating commercially and treating waste streams currently, while you build the second unit? That's the first question.

That's correct, Walter. It runs -- it does about 650 gallons a day, and it's running about 4 days a week consistently. There was some downtime associated with it, our average is around 4 days a week. And again, we've taken what we've learned from that system and engineering issues with that and perfected it to the next system. So that next system will be more efficient in operations. But yes, it does about 650 for the gallons today.

And as a range, not a specific number, for your ability to eliminate those PFAS chemicals, pricing is roughly where? For gallons?

Really, it depends on volume, but if we get a big volume, we typically discount, and it also depends on the characteristics of the PFAS concentrations and those types of things. But to give you a range, for bigger totes, we can do between $11 and $15 a gallon. For smaller quantities like a drum or buckets, a lot of that AFFF comes in smaller quantities, it can be above $30 a gallon. So it just depends on the quantities we're getting. As we get to the larger volumes that we can handle with the new system, we'll be pushing for larger volumes to receive, so we don't have to handle as much. But just to kind of give you a range, Walter, $10 to $15 a gallon is a pretty good range for higher volumes.

And on higher volumes with that price range, a range for some sort of operating profit margin?

It's typical -- we try to design our system from the very beginning to stay in alignment with our other waste treatment margins, which incrementally our target is 60% to 70% incremental margins on average. So some maybe more, some maybe less depending on a lot of different factors, but it's generally alter in line with our treatment margins across the company.

And my last question, the second unit to get you up to 3,000 gallons, the CapEx to build that was roughly what? Or is roughly what? Since it's not up yet?

Yes. It's in the -- correct me if I'm wrong, Ben, the $5 million -- $4 million to $5 million range, yes.

Thank you very much. While we appear to have reached the end of our question-and-answer session. I will now hand it back over to the management team for their closing comments.

Okay. Thank you, Jenny. And overall, we believe that Perma-Fix is entering a period where the strategic investments we've made over the past several years are beginning to translate into meaningful growth opportunities. We've significantly expanded our treatment capacity at our Perma-Fix Northwest facility strengthened our operational infrastructure, increased our treatment backlog and expanded our international project activity. At the same time, we continue to advance our additional opportunities across government and commercial markets, including projects related to nuclear remediation, weapons production and waste treatment, international waste streams and emerging PFAS destruction solutions. Importantly, the transition of the DFLAW system into its operational phase along with several additional infra-related waste streams and long-term remuneration initiatives currently under development represent meaningful catalysts for increased activity at our Northwest facility. While the timing of certain waste receipts and project mobilizations may create some variability in near-term quarterly results, we believe the second quarter should mark the beginning of a broader ramp and activity as additional waste streams begin moving through the -- and for cleanup system and new product work begins contributing to the revenue. As activity levels increase and we utilize more of this expanded treatment capacity, we believe higher throughput across our facilities should allow us to better absorb fixed operating costs and achieve meaningful margin improvement. When we consider the combined impact of the DFLAW ramp, additional Hanford cleanup programs, the tank retrieval and grouting initiatives currently under development, expanding international opportunities and the continued advancement of our PFAS technology, we believe the long-term opportunity for Perma-Fix has never been stronger. With that operator, thank you.

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