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Perma-Fix Environmental Services Inc. Message Board

  • roboklerk roboklerk Aug 7, 2013 4:43 PM Flag

    What Happens When CHPRC Subcontract Expires

    after the 3Q, for service work related to Hanford. I think beginning in 4Q it drops over $5 million out of the quarterly revenue stream, but it sounds like it may not be that big a deal as the costs related to that work go away as well? I suppose some variable costs (labor) go away, but I also assume that work supports some fixed cost overheard as well. How can you lose 20%+ of your revenue stream and not have EBITDA or income impacted? Maybe they expect other small contract work to fill the void? Anyone make any inferences from the CC from this I could't really hear an explanation even though a couple analysts asked about it, TIA

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    • that consideration aside, IMO the quarter was a minor positive inflection point--and I think that is important. It helped stabilize the stock price and provided some liquidity for both buyers and sellers today. A major positive inflection point would require a large ($100 million+) contract award. Hanford leak clean-up seems a ways in the future (next year?) and Los Alamos is probably a bust. In the meantime they need to keep hitting singles and chugging forward. 3Q seems it will be ok. 4Q w/o the Hanford service work is a question mark I wish i had a better handle on.

      • 1 Reply to roboklerk
      • sounded like Centofanti said the other company cost savings initiatives and new projects would make up for the lost CHPRC Hanford service business next year, but did not say anything about 4Q impact this year (2013) since that work finishes Sep. 30. So perhaps there could be a little risk of slippage before next year (in 4Q 2013) if no new net business comes in before then? Of course we will probably not know that until 4Q results are reported late in the first quarter of 2014. Just saying I wouldn't gloss over lost revenue of $20-$25 million annually and assume it could be easily replaced. Of course at $0.45 per share how much cheaper would one wait to buy if you thought the story was turning? I feel a bit more positive, but it is still a very tough call and very speculative investment. I feel like I have three months visibility, which is better than what I had before, but not sure it is enough to reinstate the half-position I sold.

 
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