펄마픽스(PESI) 2026 회계연도 2분기 실적 발표 컨퍼런스 콜: 620만 달러 손실, 한포드 그라우팅 사업 수주

핵심 요약

• 2026 회계연도 2분기 매출은 전년 동기의 1,460만 달러에서 1,290만 달러로 감소했으며, 순손실은 270만 달러에서 620만 달러로 확대되었습니다. 희석 주당순손실은 0.15달러 대비 0.32달러를 기록했습니다.
• 폐기물 처리(Treatment) 매출은 전년 동기 대비 약 310만 달러 감소했습니다. 2분기에 인력 채용 및 운영 비용이 발생했음에도 불구하고, 고객사의 요청에 따른 처리 방식 변경으로 인해 처리 및 관련 매출 인식이 하반기로 이월되었습니다.
• 폐기물 처리 수주 잔고는 1,220만 달러에서 1,570만 달러로 전분기 대비 29% 증가했습니다. 경영진은 이미 현장에 반입된 지연 물량이 3분기 중 처리되고, 분기 말까지 미처리 수주 잔고 해소가 실질적으로 완료될 것으로 예상합니다.
• 퍼마픽스 노스웨스트(Perma-Fix Northwest)는 핸포드 탱크 폐기물 시멘트 고화 작업을 지원하는 마스터 IDIQ 하도급 계약을 수주했습니다. 해당 계약은 모든 하도급 계약업체가 공유하는 총액 상한이 약 44억 달러이며, 개별 작업 명령은 2027년부터 2041년까지 발주할 수 있습니다. 다만 퍼마픽스에 특정되어 할당된 금액은 없습니다.
• 서비스(Services) 매출은 전년 동기 대비 44% 증가한 460만 달러를 기록했습니다. 회사는 향후 18개월 동안 반영될 서비스 수주 잔고가 1,700만 달러를 웃돈다고 발표했습니다.
• 퍼마픽스는 약 2,100만 달러의 순수익을 창출한 주식 공모를 완료한 후, 현금 2,050만 달러, 부채 약 210만 달러로 이번 분기를 마감했습니다.

주요 재무 데이터

사업 및 운영 실적

처리 지연으로 2분기 실적 압박

퍼마픽스는 이번 분기 동안 예상되었던 핸포드 관련 폐기물을 수령했으나, 고객사의 처리 프로토콜 변경 요청으로 처리가 2분기에서 3분기로 지연되었습니다. 회사는 이미 인력을 채용하고 운영 비용을 지출하여 비용과 매출 인식 간의 불일치가 발생했습니다.

폐기물 처리 실적은 예상보다 늦어진 프로젝트 착수와 수익성이 낮은 기존 보관 폐기물 처리의 영향도 받았습니다. 경영진은 해당 작업이 현재 거의 완료되어 예상되는 탱크 폐기물 수령을 위한 처리 용량이 확보되었다고 밝혔습니다.

핸포드 고화 처리 프로그램 진척

H2C 마스터 하도급 계약은 핸포드의 탱크 폐기물 운영, 폐쇄, 고화 처리 및 처분을 포함합니다. 퍼마픽스 노스웨스트는 발생지 근처에 위치한 유일한 선정 시설로, 액체 폐기물을 현지에서 고화 처리한 뒤 안정화된 물질을 처분지로 이송할 수 있게 합니다.

해당 시설은 현재 연간 120만 갤런을 처리하고 약 65만 갤런을 보관할 수 있는 인가를 보유하고 있습니다. 퍼마픽스는 인가받은 연간 처리 용량을 1,000만 갤런 이상으로, 보관 용량을 80만 갤런으로 확장하는 방안을 추진 중입니다.

경영진은 필요한 설비 개선 작업이 기존 건물 내부에서 진행되고 있으며 주요 항목은 혼합기, 전력, HVAC, 콘크리트 및 관련 인프라라고 설명했습니다. 회사는 주로 워싱턴주 인가 일정에 따라 확장된 처리 용량이 2027년 중반경 가동될 것으로 예상하고 있습니다.

미국 에너지부(DOE)의 공개 계획에 따르면 빠르면 2026년 말부터 월 약 6만 갤런의 폐기물이 고화 처리에 투입될 수 있으며, 1월부터 출하가 시작될 경우 2027년 연간 약 72만 갤런에 해당합니다. 경영진은 퍼마픽스가 아직 작업 명령을 받지 않았음을 강조했습니다. DOE의 예상 물량은 2028년까지 월 약 13만 갤런으로 증가하며, 핸포드 동부 및 서부 탱크 구역 전체의 장기 목표는 2030년까지 연간 900만 갤런입니다.

DFLAW 폐기물 수령 시작

분기 말 이후 퍼마픽스는 핸포드의 직접 공급 저준위 폐기물(DFLAW) 시설로부터 액체 배출수 및 건식 폐기물을 수령하기 시작했습니다. 경영진은 DFLAW가 제시한 목표치인 월 약 10만 갤런에 비해 평균 월 1만 갤런 수준으로 운영되어 왔다고 말했습니다. 생산량은 7월에 3만 5,000갤런에 달했으며 8월에는 늘어날 것으로 예상되었습니다.

회사는 EMF 폐기물 스트림이 2027년 1월 새로운 H2C 계약이 발효된 후 해당 계약 하의 작업 명령으로 전환될 것으로 예상합니다.

원자력 서비스, 제2의 성장 동력 제공

서비스 매출은 1분기에 발표된 약 2,400만 달러 규모의 로렌스 리버모어 마스터 작업 협약을 포함한 신규 프로젝트 수주의 수혜를 입었습니다. 퍼마픽스는 또한 여러 DOE 사업장과 추가적인 민간 및 해외 계약을 확보했습니다.

경영진은 회수 및 정화 프로젝트에서 발생하는 폐기물이 추후 회사의 처리 시설로 반입될 수 있어, 서비스 수주 잔고가 향후 처리 수요로 연결된다고 언급했습니다.

여름철 PFAS 사업 활동 개선

회사는 민간 및 정부 고객을 위한 PFAS 처리 작업을 완료했으며 처리 용량 확대를 위해 2세대(Gen 2) 유닛을 설치했습니다. 5월까지의 저조한 수령 실적 이후, 경영진은 여름 동안 매출 및 처리 수익이 개선되기 시작했다고 밝혔습니다. 현재 입찰 파이프라인에는 약 800만 달러 규모의 잠재적 신규 수주가 포함되어 있지만, 이러한 기회가 아직 확보된 것은 아닙니다.

경영진 전망

경영진은 2026년 하반기 실적 개선에 대한 자신감을 나타냈으나 공식적인 매출이나 이익 가이던스는 제공하지 않았습니다.

회사는 이미 현장에 보관 중인 지연 폐기물이 조만간 처리 과정에 들어가 3분기 말까지 미처리 물량을 해소할 수 있을 것으로 보고 있습니다. DFLAW 관련 반입 물량은 연말까지 늘어날 것으로 예상되며, 핸포드 마스터 하도급 계약 하의 작업 명령 발주는 2027년 1월부터 가능해집니다.

퍼마픽스는 보유 유동성, 예상 영업활동 현금흐름 및 대출 가능액을 통해 향후 12개월 동안의 운영 자금을 충당할 수 있을 것으로 예상합니다. 분기 말 이후 회사는 PNC 은행과의 신용 한도 약정 만기를 2027년 5월에서 2030년 5월로 연장했습니다.

위험 요인 및 주시 사항

• 퍼마픽스에 아직 할당된 핸포드 고화 처리 작업 명령은 없으며, 약 44억 달러 규모의 IDIQ 상한액은 여러 하도급 계약업체가 공유하고 있습니다.
• 향후 핸포드 물량은 DOE의 운영, 규제 승인, 탱크 회수 일정 및 고화 처리와 유리화 처리 간의 폐기물 배분 비율에 따라 달라집니다.
• 퍼마픽스 노스웨스트의 인가 용량 확장에는 워싱턴주의 승인이 필요합니다. 경영진은 이 규제 승인 절차가 핵심 경로(primary critical path)라고 설명했습니다.
• DFLAW 가동률이 여전히 목표치 이하로 유지되고 있어 관련 폐기물 수령의 시기와 규모가 불확실합니다.
• 운영 중단 및 탱크 간 전환으로 인해 핸포드 폐기물 유입이 불균일할 수 있으나, 경영진은 동부 및 서부 구역의 합산 물량이 연간 예측 가능성을 개선할 것으로 기대하고 있습니다.
• 예측치가 보장되지 않는 미국 정부 고객이 주도하는 폐기물 수송 및 프로젝트 활동에 의존하고 있기 때문에, Form 10-Q 보고서에는 계속기업 관련 공시가 포함되어 있습니다.

애널리스트 Q&A 주요 내용

애널리스트들은 핸포드 물량, 처리 용량 확장, 계약 수익성 및 매출 가시성에 집중했습니다.

경영진은 기존의 연간 120만 갤런 인가 용량으로도 월 6만 갤런의 초기 예상 물량을 수용할 수 있다고 밝혔습니다. 더 큰 규모의 인가 변경 및 설비 프로그램은 연간 900만 갤런이라는 DOE의 장기 목표를 지원하도록 설계되었습니다.

계약 단가와 관련해 경영진은 계약 상한액을 최대 누적 물량으로 나누는 것에 대해 경고했습니다. 갤런당 매출은 폐기물 성분, 방사능 및 추가 처리 요구사항에 따라 달라집니다.

경영진은 핸포드 탱크 폐기물이 사업 기간과 상대적인 일관성 덕분에 회사의 가장 지속 가능한 장기 폐기물 스트림이 될 잠재력이 있다고 평가했습니다. 그러나 펌핑 및 처리 중단으로 인해 주기적인 변동성은 여전히 발생할 수 있습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, ladies and gentlemen, and welcome to the Perma-Fix Environmental Services Fiscal Second Quarter 2026 Earnings Conference Call. [Operator Instructions] And please note, this conference call is being recorded.

I will now turn the conference over to your host, Mr. David Waldman with Crescendo Communications. Sir, the floor is yours.

David Waldman

Thank you, Oli. Good afternoon, everyone, and welcome to Perma-Fix Environmental Services Second Quarter 2026 Conference Call. On the call with us this afternoon are Mark Duff, President and CEO; Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer.

The company issued a press release this afternoon containing second quarter financial results, which is also posted on the company's website. If you have any questions after the call, or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020.

I'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 afternoon's press release. The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events or circumstances after the date hereof that bear upon forward-looking statements.

In addition, today's discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website.

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

Mark Duff

All right. Thanks, David, and good afternoon, everyone. Thank you for joining us.

I want to start by being direct about the quarter. Our second quarter financial results were below expectations. Revenue was $12.9 million, and we reported a net loss of $6.2 million. That is not the quarter we wanted to deliver, and I am going to walk you through exactly what happened and why. But I also want to be clear about something the second quarter delivered the operational milestones we've been working for, for years. And those milestones, not this quarter's results are what will define where the company is headed.

Yesterday, the Department of Energy's Hanford Tank Contractor, H2C, announced the award of the master IDIQ for tank waste operations and closure for grouting and disposal to support the tank retrieval and disposition mission at the site. This mission is one of the most important programs within DOE's Office of Environmental Management and reflects this administration's priority to accelerate the removal of risk associated with the 56 million gallons of waste stored in the tanks at Hanford. The contract carries a maximum value of approximately $4.4 billion with task orders eligible to be issued from 2027 through 2041. And to be clear, that is a ceiling shared among all subcontract holders, not an amount awarded or committed to Perma-Fix.

The program is supported by the tri-party agreement with the state and federal regulators to remediate 22 tanks from the West -- 200 West Tank area during that period. In addition, the contract was modified during the RFP process to include other tank and liquid waste streams to provide a contract vehicle for the 200 East Tank area as a supplement to the DFLAW program.

While this award is an IDIQ contract vehicle, it will be used by H2C to issue task orders for specific volumes of waste to be dispositioned within the defined periods. H2C also awarded master sub contracts to two other companies, both located out of state. Perma-Fix Northwest is the only facility of the three where these liquids can be grouted near the point of generation without long-haul transport of liquid tank waste.

Our Perma-Fix Northwest facility located about a mile from the Hanford site will provide the capacity to meet the goals for tank retrieval and liquid waste processing as the program grows to meet the DOE EM goals and objectives. We've been preparing for this program for some time, upgrading our facilities, procuring large-scale treatment equipment, expanding our workforce through hiring and training and acquiring the rail line parcel that connects Perma-Fix Northwest to the Port of Benton shortline railroad for rail -- for direct rail shipments of treated waste.

Under the performance work statement for the contract, we are required to maintain the capability to treat and dispose of pretreated tank waste at the rate of 100,800 gallons per week over a seven-week period. When annualized, this level is well above our current permanent annual capacity. And that is why we're expanding our current permit that I'll discuss in a moment, which is already underway to support the task orders that will be eligible for beginning in January.

Let me turn to why we're confident about the second half and beyond. DOE has adopted what it calls the Hanford dual glass-plus-grout strategy. In DOE's own framing, grouting is a proven technology already approved under the Hanford Holistic Agreement and the Savannah River site has also treated 13 million gallons of tank waste inventory in the same way. DOE projects the approach will deliver up to 300% more throughput while reducing treatment and disposal costs from roughly $1,200 per gallon to under $50 per gallon in contrast to vitrification costs.

DOE has presented a dual path strategy to stakeholders specifying Perma-Fix Northwest as the grouting provider for the EMF secondary waste effluent stream, which is the -- material we're receiving today. The H2C contract awarded yesterday will likely be used as a contract vehicle for the EMF beginning in January when the contract becomes active.

On volumes, I want to be precise because these numbers get quoted loosely. The glass-plus-grout approach includes acceleration of tank retrieval operations at 100,000 gallons per month using the existing TSCR. In case you don't know,0020the TSCR is the tank side cesium removal system, which is an ion exchange system, which removes the radioactive component of cesium, most of it from the waste stream. And that TSCR is a critical part to pulling the waste out of the tanks currently.

By 2020 [Audio Gap]

Operator

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

Mark Duff

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

Ben Naccarato

Start at where you were discussing the TSCR.

Mark Duff

Okay. All right. So explained what the TSCR was, I assumed, which is the tank side remediation removal system, which is currently capable of treating or pulling out and retrieving about 100,000 gallons per month for the -- to be loaded in the AP-106 tank. By 2028, the advanced modular -- pretreatment system, also known as AMPS will be operational reaching a total of 300,000 gallons per month of pretreated tank waste to be shared between the grouting program and the DFLAW facility for treatment.

The DFLAW storage tank, again, known as the AP-106 is currently in capacity at over 1 million gallons. So the store pretreated waste can be available for grouting while leaving ample feed for DFLAW operations without a constraint. As inventories are reduced through treatment, the TSCR can replenish the AP-106 at about 100,000 gallons per month through 2027.

DOE estimates that roughly 60,000 gallons per month will be available from the AP-106 tank for grouting beginning as early as Q4 of '26, increasing to approximately 130,000 gallons per month by 2028.

Here's the point I want to make here. At 60,000 gallons a month, we are inside our existing permitted grouting capacity of 1.2 million gallons per year. Perma-Fix continues to develop and design technology to expand our capabilities with a specific goal of ensuring that -- our Perma-Fix Northwest plant can accept and process the full volume of waste Hanford provides for grouting, treated locally and shipped by rail for disposal and in contrast to our competitors, which will be transporting liquid waste on public highways for treatment and disposal out of state.

That expansion is what we need the West -- that expansion is what we need the West Area tank program, which is -- will support the West Area tank program, which is a separate and substantially larger opportunity. Across both the East and West Tank areas, DOE totals are targeted to reach 9 million gallons annually by 2030, 9 million gallons of pretreated waste to be grouted annually.

Perma-Fix Northwest has submitted a permit modification request to the State Department of Ecology and is working with these regulators to expand our grouting permit from its existing annual capacity of 1.2 million gallons per year to the levels that meets DOE objectives for both the East side and the West Side tanks. The facility is in final design and procurement for the upgrades needed to achieve that expanded capacity, which should be ready by the third quarter of 2027.

One development worth noting, the H2C procurement decision moved forward through this process in regards and awarded for an off-site treatment path rather than construction of a new on-site facility, which was included as an alternative within the H2C RFP. Consistent with that, on June 29, DOE notified the State of Washington of Ecology that its near-term selection for treating 200 West Area tank waste is off-site commercial treatment with transport by truck rail or both.

This is a favorable development for a facility positioned as we are. Perma-Fix Northwest sits immediately adjacent to the Hanford site. We're permitted today, we're operating today, and we're receiving Hanford tank waste today for grouting. There's no facility to design or build and no facility to commission. For DOE, that means a treatment path that is available now rather than years from now, the shortest possible transport of liquid waste and no government capital outlay to get there. We believe the combination is difficult to replicate.

It's also a distinction worth drawing between grouting near Hanford and shipping this waste material out of state for treatment. Under our approach, the waste is solidified in Richland and only stabilized grout travels on public roads out of state. It leaves Washington as a solid in a form that cannot leak. The alternative is a long-haul transport of liquid tank waste across multiple states through treatment facility in Texas or Utah. Oregon and regional stakeholders have publicly urged DOE to solidify this material before it leaves the Hanford region and our facility is what makes that possible. It is also work performed by local building trades through our relationship with the UA Local 598, which keeps skilled jobs and expertise in the Tri-Cities area.

In addition to this critical announcement in early July, subsequent to the quarter end, Perma-Fix began receiving liquid effluent waste from the DFLAW facility at Hanford. I don't want to get too lost in the numbers. It's a culmination of years of permitting, capital investment and operational preparation. We built the capacity we obtained -- we built the capacity, we obtained the permits and we staffed the plant in anticipation of this waste and it's now starting to arrive.

We have since begun receiving additional waste streams from DFLAW operations, including dry waste generated by the plant operations, which we're processing for disposal at the local Hanford site landfill.

So this is not one system, or one waste stream. It is a growing number of waste streams from a plant that is still ramping up and DOE forecast -- throughput goals increase each month at the DFLAW operations, and they're working towards through production issues and associated equipment modifications to reach their objectives for 1 million gallons per year through vitrification at DFLAW.

Now let me explain why the quarter looked the way it did. We received the Hanford-related waste streams we expected during the quarter. That part of the -- that part of our plan worked, and you can see that reflected in our backlog. Treatment-related backlog grew by 29% from $12.2 million at March 31 to $15.7 million at June 30. What did not happen on schedule was treatment. Our customer directed changes to the treatment protocol for these waste streams to accommodate a change in disposal facilities. This delayed processing from the second quarter into the third quarter. These changes supported the receipt of the waste for solidification, but did not support processing subsequent -- and subsequent revenue recognition.

We already added the personnel and incurred the operating cost to handle these volumes, so the cost landed in our second quarter, while the associated revenue moved into the second half, and that mismatch is the primary driver of the Q2 loss.

Two other items contributed. First, several new services projects started later than anticipated. Secondly, we processed our previously stored waste, lower-margin inventory waste, which compressed our treatment margin during that quarter as well. That work is now substantially complete and it frees up capacity ahead of our anticipated tank waste receipts. On the delayed waste streams, we expect to begin processing shortly and to be caught up by the end of the third quarter.

So when I say we're encouraged about the second half, here is what is in front of us. The delayed waste we already hold -- we already have on site moves through treatment in the third quarter. DFLAW-related receipts continue to build through the balance of the year and task orders under the Master Subcontract become eligible in January of '27.

Turning to Nuclear Services. This segment is providing a second engine of growth for us, and it's doing something else that really matters. It adds stability while the treatment volumes ramp. Services revenue grew 44% year-over-year in the quarter to $4.6 million from $3.2 million following the approximately $24 million Lawrence Livermore Master Task Agreement announced in the first quarter. We secured an additional awards during the second quarter at multiple DOE sites. along with several commercial and international contracts. Together, these support services backlog are over $17 million over the next 18 months.

There's a second benefit that is easy to miss as well. Much of this work is waste retrieval and retrievable operations generate material that flows through our treatment plants. So services backlog is not just stability, it's also a feeder into our Treatment segment.

Last week, we announced a strategic partnership with the Mirion Technologies under the Small Business Administration's Mentor-Protégé Program. The logic is straightforward. Cleanup missions across the DOE complex are getting larger and more technically demanding with much more difficult challenges. Our treatment infrastructure, remediation capabilities and project management combined with Mirion's radiation detection technologies and measurement and instrumentation expertise gives us a stronger position to compete for that work. It's a natural extension of where we've been heading and it widens the range of work we can offer.

Before I turn things over, a brief word about PFAS. Our PFAS platform continues to advance with completed treatment work for both commercial and government customers and the installation of our Gen 2 unit to expand capacity. Our permanent destruction of PFAS remains one of the clearest unmet needs in this market, and our technology continues to maintain delivery of total destruction with no emissions and a significant value over incineration.

While we realized a slowdown in PFAS receipts through May, sales and processing revenues have begun to increase through the summer with several awards from regional airports and commercial generators to support a solid backlog through Q3, including nearly $8 million in future award opportunities within our current pipeline of bids.

Finally, a word on capital. In May, we completed a public offering with net proceeds of approximately $21 million, and a portion of that funding will be funding the DFLAW upgrades as well as our grouting upgrades at Perma-Fix Northwest. That capital is going directly into the capacity we've been discussing this afternoon.

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

Ben Naccarato

Thank you, Mark, and good afternoon, everyone. For the second quarter of 2026, we reported revenue of $12.9 million compared with second quarter of '26 -- I'm sorry, compared with $14.6 million in the second quarter of '25. We reported a net loss of $6.2 million compared to a net loss of $2.7 million in the prior year. Both our basic and diluted loss per share was $0.32 compared to losses of $0.15 in the second quarter last year.

Within our Treatment segment, revenue declined approximately $3.1 million from prior year. The decrease primarily reflected the lower processing volumes across the segment together with unfavorable waste mix, which resulted in higher treatment and other variable costs and lower gross profit. These operational factors, specifically a customer directed hold on processing as well as the focus on previously -- previous stored waste were the primary drivers of the year-over-year decline in treatment segment revenue and profitability.

Despite these short-term challenges, waste receipts continued to improve. New waste receipts increased by $4.1 million over the first quarter, and our treatment backlog ended the quarter at $15.7 million compared to $13.1 million at the end of second quarter last year. We believe these are important leading indicators and reflect customer demand and provide improved visibility into future processing activity.

Our Services segment generated revenue that was $1.4 million higher than prior year, driven by contributions from several new project awards. These gains were partially offset by the completion of certain projects that contributed revenue in the prior year. Gross profit in this segment also improved modestly year-over-year, reflecting the higher revenue, partially offset by increased labor and other indirect costs.

Turning to our administrative expenses. SG&A decreased by approximately $379,000 compared with prior year's quarter, primarily reflecting lower marketing, E&P and credit losses, partially offsetting higher legal costs.

Turning to the balance sheet and cash flow. We ended the quarter with $20.5 million in cash compared to $11.8 million at year-end 2025, reflecting the successful equity offering completed in May. Working capital also improved to $18.4 million, while treatment backlog increased, as mentioned earlier to $15.7 million, strengthening both our liquidity and our visibility into future revenue.

Our continuing operations year-to-date operating activity used $8.8 million of cash, primarily reflecting the operating losses and normal working capital requirements as we continue to build backlog and execute projects. We invested $2.9 million in capital expenditures and other investing activities with approximately $2.7 million directed towards strategic capital projects that support future growth and operational capabilities.

Finally, our financing activities provided $20.9 million of cash primarily from the May equity raise, which strengthened the balance sheet while allowing us to continue investing in key growth initiatives. We ended the quarter with a total debt of approximately $2.1 million, maintaining a conservative capital structure.

Before I turn it over, let me address the going concern disclosure in our Form 10-Q, which we included to comply with accounting guidance and because the forecasts we use depend on waste shipments and on project activity directed by the U.S. government customers, which are not guaranteed. Nevertheless, we ended the quarter with $20.5 million in cash, approximately $2.1 million of total debt, and we expect existing liquidity, anticipated operating cash flows and borrowing availability to be sufficient to fund our operations over the next 12 months.

In addition, subsequent to the end of the quarter, we amended our credit agreement with PNC Bank to extend the maturity of the facility from May 2027 to May 2030, further strengthening our long-term relationship with our lender.

With that, I'll now turn the call over to the operator for questions.

Operator

[Operator Instructions] Our first question today is coming from Aaron Spychalla with Craig-Hallum.

질의응답

Aaron Spychalla

First for us, can you talk about potential volumes for grouting as we look later this year, more so into 2027. The RFP kind of talked about some task orders starting in '27. And obviously, it sounds like there's some excess capacity on the East side to be able to handle some grouting. So just if you could elaborate on that, that would be great.

Mark Duff

Sure. Thanks, Aaron. Let me see if we can get into some details here. Again, I think everyone understands that DOE hasn't formally awarded any task orders yet. But we're in an interesting situation. DOE has held several stakeholder meetings recently, including one with the State of Oregon back in June and one today with the Hanford Advisory Board in Richland. Both of those can be found on YouTube.

And in this presentation, along with other presentations along the way, DOE has presented a graphic that is quite clear. This graphic defines their near-term plan to ship waste from the 200 East Area Tank program to -- directly to Perma-Fix Northwest by name. Again, this graphic is part of the dual glass-plus-grout strategy overall. So it's what has been written up in several press releases and op-eds and letters from the Assistant Secretary, Tim Walsh.

And it includes on this graphic a depiction of AP-106 tank, which is the storage tank again, and shows that they'll be shipping waste for grouting from that tank to Perma-Fix Northwest. And then we'll also be shipping waste from the EMF facility to Perma-Fix Northwest, which they're obviously doing now.

Along within that graph, it also has some anticipated volumes and coming out of the TSCR or coming from AP-106, which, again, as I said before, will be replenished by the TSCR, they're anticipating that they'll be able to ship 60,000 gallons per month beginning in 2026 and which we anticipate to be late in '26 and to maintain that 60,000 gallons a month for grouting through 2027. So roughly, was at 720,000 gallons in 2027, assuming they start right in the beginning of the month of January.

That also is important to understand, it depends on how much of the AP-106 tank they use for the vitrification. If vitrification does get ramped up, that 100,000 gallon capacity that TSCR operates at, in other words, it pumps it into that tank at 100,000 gallons a month. If they don't use it for vitrification, those 60,000 gallons could go up. And then again, if DFLAW picks up operation it gets moving quicker, that number could go down.

So we would anticipate, based on the graphic, about 60,000 gallons a month. Again, we don't have a task order, but because of the graphic and the way it's been presented to the public, we're confident that we'll be able to see a task order for that here in the next several months.

In addition to that, as I said in the script, the AMPS is coming online in late '27 and is anticipated to be at full speed by 2028. That volume in '28, they're anticipating to be 300,000 gallons a month just from the amps itself. Again, a portion of that will go to the vitrification of DFLAW and a portion will come for grouting. Again, on the graphic, it specifically says that DOE anticipates 130,000 gallons a month coming from the AMPS system once it gets up and running in '28.

So you can kind of get a sense of what DOE is looking at as far as potential volumes in the near term. And we're very excited about that. And we love them showing that graphic. Like I said, they showed it today at the Hanford Advisory Board meeting. Again, to be clear, it's in DOE's presentations in the public space, but we don't currently have a task order for it.

Just to give a little bit more color on the West Side, the numbers are staggering. The West Side Removal System, which is called the WRMS, it's a different system. It's bigger overall, bigger infrastructure. That's designed to go at 3 million gallons a year. So the total capacity for that system plus the AMPS system and the TSCR system, DOE is saying should exceed 6 million gallons a year annually. But their goal is to push those, and they have a plan to do that. And DOE has been very vocal that their goal is to get to 9 million gallons a year to be grouted sometime after 2030.

So the goals are very high. They have a plan for them. Obviously, there's regulatory considerations along the way. But this administration has been very, very bullish about this program and the importance of showing and demonstrating progress for the $3 billion a year that is -- makes up the Hanford budget and the fact that that's been a long time coming for this program to actually show progress. So we're really excited to be part of it.

And this -- again, as I said in the script, the fact they didn't make an on-site award takes a lot of risk off the table for us. And -- there's no provision for any other regional new construction as defined by the WEIR document. So really, it's coming down to our cost versus our competitors and whether the DOE wants to transport liquids out of state for processing.

Aaron Spychalla

Great. And then saw some of the recent modifications, Class II, Class III. Can you kind of talk about how that might impact the glass-plus-grout strategy and any impact to those schedules?

Mark Duff

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

And that's a very, very aggressive turn on behalf of the state regulators, which we would speculate underscores the fact that the state is working with DOE on this and is making it happen. And that -- if they meet that goal with the October 6 public comment period, barring not too many public comments that they should extend it, then DOE will be -- the state will be in a position to provide potentially permit modifications in -- by mid-October, late October, and DOE could be in a position to actually start shipping waste for grouting later in Q4.

Again, this is speculation. There's maybe some other things we don't understand overall, but just a general process for this to me and our staff shows that this was a collaborative effort between the two organizations and that this program can get going as they're hoping for to be in full stride in early '27.

Aaron Spychalla

Great. Yes, I hope so. And one more question on -- in the RFP announcement, the DOE you mentioned the EMF waste stream to be included in that contract, too. Do you anticipate any impact to the EMF program that you're seeing? It sounds like that started to pick up here. And I know you don't guide kind of quarterly, but just it sounds like pretty constructive on improvements in the third quarter, maybe partially driven by that. If you could talk about that a little bit.

Mark Duff

Sure. The EMF contract we have now was one that was put together pretty quickly and was not competitive. So they had to use an existing contract vehicle, which has the prime for this vehicle to be the disposal facility of EnergySolutions. So they're the prime and we do the grouting for EMF and we provide that to EnergySolutions and they dispose of it.

What we're anticipating is that because of the modification in this H2C award and as defined in the press release from them, EMF will be a task order within the new contract. We do expect to receive that. Again, keeping in mind that this is covered -- we would anticipate this is covered in the ROD for DFLAW and that we would treat this waste under a new task order within the new contract and then we would ship it to the appropriate disposal facility once that task order is initiated after the first of the year.

So again, we would expect that -- and also that's kind of reiterated or defined in the graphic I mentioned as well. So we have pretty high confidence that will continue moving. Now right now, people are probably wondering how much DFLAW waste we're getting. DFLAW has been chugging along at about 10,000 gallons a month on average, which is, as you know, their goal was about 100,000 gallons a month. So it's about 1/10 of the operation. So we're not getting significant quantities at this point. That is increasing. I was told that they did 35,000 gallons in July and are expecting to beat that significantly in August this month. At the 10,000 gallons a month level, we're getting about 200,000, 250,000 a month in EMF waste and a little less than that for our first shipment from the dry waste.

So it's a pretty nominal amount at this point, but we do expect that to be ramping up. The facility is getting stronger. They're working through their issues. There was an announcement in the press today that the feed system has been replaced. They're working through the emission systems. So they're getting through the issues. And DOE is confident that they can still get ramped up to a higher percentage of operation capacity here in the next couple of quarters, and we'll likely see those quantities of waste significantly increase as they do get to a larger operating capacity.

Aaron Spychalla

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

Mark Duff

Yes. We're very encouraged by the relationship with Department of Ecology. As you know, it took more than a decade to get our renewal, and it was -- it was a difficult process. They've done very well in the last couple of years here, and they're working with us in a very supportive manner. We started working with them in February for our permit mod to increase our total capacity to meet DOE's total capacity, as I mentioned, which is right now is about 9 million gallons a year.

We've got the designs completed for the mixtures that we need to install. We also have poured concrete already, begun to purchase some of the heavy equipment so our folks can get trained on it. And we have started different components of the infrastructure upgrades as well to support the larger volumes. So we have begun making those improvements.

The permit right now is expected to take about a year, maybe none months. So we do hope to be -- have that in place for the large volume increase by Q2 -- end of Q2 next summer or sometime in Q2 of '27. And I think we're on track for that, barring any unforeseen issues along the way. And they're working very well with us. So we don't see any reason why that wouldn't be a milestone that we can meet.

So we have some ways to go. We didn't -- haven't pulled the trigger on the new mixers yet. We want to get this award first and get a feel for what the contract said. But we are anxious to get started with that. And we have a lot of confidence that DOE is going to start meeting the grouting objectives that they've defined that they put in these documents, and we want to make sure that we can handle all of it and hopefully be in a position to deliver without any constraint to DOE in regards to our processing.

Operator

Our next question is coming from Yuan Zhi with B. Riley.

Yuan Zhi

I have a couple of them mainly on today's Master Subcontract. So first, can you please clarify what's your peak processing capacity? And how long does it take to ramp up to that level so that you can meet the H2C demand?

Mark Duff

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

Yuan Zhi

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

Mark Duff

No -- it's a good question. No, we do see the primary critical path is the state. But again, we're modifying a quantity from, I guess as I said $1.2 million upwards to $10 million. And it's something -- it's a process we already do. We have a similar type of mixer, almost exact same technology that we're currently using now.

So what we're asking for is pretty much increase the quantity and then you have to address the risk or operational considerations to make that increase. So we don't see that as a heavy lift and the state hasn't either so far. So we expect that to go through. But we see that as really the only hurdle we have between here and there is that, is getting that through the regulatory body. And we have -- our guys at our Northwest plant have met with the vendors associated with the mixing technology, spent some time with them. They've worked directly with them to run surrogate types of materials that look just like the waste we're going to be receiving and to ensure that the grouting product meets our standards. So they've spent some time making sure that will happen and done some analytical work along that route as well.

Everyone is very comfortable. This is the same mixture that is used at the other DOE facilities. So it's a mixture that DOE is comfortable with and it's proven. So we're going to have a significant amount of redundancy with these additional mixtures and the mixtures we have now. So if one goes down, we can keep maintaining that. And that was a big component in the RFP that we responded to and this contract was awarded on is DOE wanted to make sure that each awardee would be able to handle that redundancy and have a plan to make sure that we don't hold them up as they're generating this waste for grouting. So we feel like we've done that in a big way.

Yuan Zhi

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

Mark Duff

That's a tough question. I can't answer that specifically. And the reason it's difficult to answer is because there's a lot of factors associated with this contract. For example, there's rates for just your basic 80% of the waste that they're anticipating being a certain type of waste with certain constituents that can be grouted very quickly and easily.

There's provisions for certain waste streams that have high organics and metals in it that will have to be treated with additional enhancements in the treatment, which bear an additional surcharge, so to speak. There's also different types of waste that can come in with higher rate of activity, which we call Class B and C waste. Those are significantly higher cost.So you could probably say an average might be at that point, but I think it'd be wrong because it could all be the easy stuff. and you just get -- you hit the 50 million gallon limit before you got to the 4.3 million.

On the other hand, if it's very complicated waste, it could be more than $80 a gallon, and you could reach the 4.3 million limit before you got to 50 million gallons. Because of the uncertainty associated with each tank, you just can't make that general statement like that. But it's a starting point for estimating the total volume and price.

Yuan Zhi

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

Mark Duff

Yes. I mean I think this is by far, the most sustainable waste stream our company has ever seen as far as the long-term nature of it and the homogeneity of the waste itself. While I just mentioned a number of different variables, it is still liquid waste that can be transported in a specific container or a set of containers. And you can anticipate time and resources very well. So it is historical, we expect it to be much more sustainable and consistent than our historical lumpiness with waste.

Now DOE has been very clear in the RFP process that it's going to be a lot of outages and the pumping and treating for grouted waste would only be, I think RFP specifically said about 50% production. In other words, they'll be up 50% with grouted waste and down as they move from tank to tank, which is why they want you to be able to store a lot of it and receive it at a very high rate and then be able to work through your inventory once you store it and start processing it.

So I'm not sure if that answers your question, but we do see a pretty average annual revenue for this overall, particularly in consideration of the East Side where they have a very sophisticated infrastructure for all the tanks on the West Side, they move more from tank to tank to tank and could have a little lumpiness. But with the East Side and West Side together, I think it's going to smooth it out a lot to the point where we can make good forecast relative to what waste volumes we anticipate getting from on a year-to-year basis.

Yuan Zhi

Got it. And congrats on winning this master contract.

Mark Duff

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

Yuan Zhi

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

Operator

Our next question is coming from Steven Fein with [SoFein] LLC.

Steve Fein

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

Mark Duff

Yes. Again, within our modifications, just to be clear, Steven, are in existing buildings. So we're not having to build any new buildings. We'll have to do some upgrades, as I mentioned, to the infrastructure, the HVAC and the power and a lot of concrete pouring to handle large volumes of trucks coming in and out, a lot of equipment we have to buy. But pretty much the primary job is installation of the mixers. And the mixers we're going to install will be basically the capacity, each mixer will be adequate to cover the DOE receipts.

Again, I don't want to get into details of what we're doing because it's really kind of proprietary at this point. But we're in a position, as I've said over and again, to meet the DOE demand and that demand is expected to get to 9 million gallons by 2030. So we're going to be prepared to meet that need with the mixers we're installing.

Steve Fein

By next year or by 2030?

Mark Duff

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

Steve Fein

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

Mark Duff

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

Steve Fein

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

Mark Duff

A little bit less than that, yes. So basically, we'll be operating at a pretty rapid pace. And we'll be able to take receipt of that waste. And if we have an outage or something, we'll be able to handle receipt of that waste, correct?

Steve Fein

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

Mark Duff

Yes. It's -- I don't know if I underscore that enough, but DOE has been very clear to other stakeholders and publicly that the DFLAW is their primary approach and that grouting is a supplement to vitrification. But DOE is looking at this pragmatically saying, hey, the bottom line is, our goal should be to close as many tanks as we possibly can for the budget we have got. And that's why this dual strategy has come to the surface so that they're recognizing the fact that while we do want to do the treatment of the vitrification and dispose of the vitrified waste at the Hanford landfill to really begin to close tanks for the same budget, grouting makes a lot of sense because it's substantially cheaper, as I mentioned.

So yes, we're excited about it. The regulators are cautiously optimistic as we're reluctant to jump in with both feet. They've said publicly many times that they don't want DOE to get distracted by grouting. But this administration has been very, very focused on progress and at Hanford, particularly with questioning everything to optimize our approach and to consider commercial value and commercial approaches that can really save money. This is one of them.

And if you look at some of the older testimonies by former Secretaries of Energy, when Congress asked them, how are you going to get to where the facility is closed and how long is it going to take? If it's 100 years and it's $10 billion a year, that's never going to happen. Grouting puts the entire life cycle of the closure into perspective where it can happen, and it can happen aggressively if DOE steps up and supplements the program with this type of approach.

Steve Fein

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

Mark Duff

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

Steve Fein

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

Mark Duff

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

Steve Fein

All right. So what I'm essentially trying to say is my understanding, and I guess maybe I'm touching on sensitive things here is that you essentially said it, whatever is vitrified, they're still generating waste, while whatever you get, you process and there's no waste generated, correct? So that's a distinct difference. Am I correct on that point?

Mark Duff

That's correct. That's correct. Yes.

Steve Fein

Okay. And then the next thing is they talk about volumes, all right? So there's 50-some million gallons in those tanks. But my understanding is they got to liquefy that stuff to be able to process it because it's a solid mass, which potentially could mean that there's, what, 150,000 to 200,000 gallons that have to be processed. Is that true?

Mark Duff

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

Steve Fein

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

Mark Duff

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

Steve Fein

Well, the real question is, and I guess you'll probably never talk to me again. The real question is, is this going to -- is the vitrification going to augment and flow as it's been flowing like a nightmare. And the other thing is, I mean, you guys are environmentally safe. Everything you do is safe while you're talking an environmental nightmare over there. I said that, I didn't ask the question.

But the bottom line here is Savannah grouted and it's been -- the government has finally woken up. I'm glad to hear in these challenging times that the government is finally seeing the reality that there's a lot of waste there and also more importantly, that the waste is of a form that is more suitable to growing than it is to vitrification.

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

Mark Duff

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

David Waldman

Unfortunately, ladies and gentlemen, we have reached our allotted time for question and answers. So I'm afraid I will have to turn it back over to management for closing remarks.

Mark Duff

Okay. Thank you. Thank you all for your questions, and thank you for joining us this afternoon. I want to leave you with this. The second quarter was disappointing financially. And I'm not going to characterize it any other way. We received the waste we said we'd receive and grew backlog 29%. DFLAW eceipts have commenced. H2C has awarded a master subcontract for the Hanford tank waste grouting and DOE has named our facility in the plan it presented publicly for the largest waste treatment program at Hanford.

We have the capacity, the permits and the balance sheet to support it. We're highly encouraged by the outlook of the second half of 2026, but the opportunity ahead of us is much bigger. Our facility is permitted today for 1.2 million gallons per year, and DOE's plan contemplates 9 million gallons annually by 2030. This is the scale of the program we're heading --we're building capacity to serve, and it's not a project or a projection. It's a program measured in decades tied to a cleanup mission federal government is legally obligated to complete. We look forward to updating you on our progress in the future. Thank you.

David Waldman

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