Louis F. Centofanti, chairman and chief executive officer, said, We achieved revenue of $22.0 million, EBITDA of $1.9 million and net income of $548,000 for the first quarter of 2009, our seasonally weakest period. Revenue within our Nuclear Segment increased 36.7% compared to the same period last year, despite a continuation of constrained budgets within the U.S. Department of Energy (DOE) during the first quarter. Heading into the second quarter of 2009, we anticipate benefitting from the recent increases in the DOE’s budget, which includes an additional $6 billion from The American Recovery and Reinvestment Act for nuclear waste clean-up throughout the DOE complex over the next two years.
In addition to the increased funding for nuclear waste clean-up, we are also pleased to report we have begun to receive shipments of radioactive Polychlorinated Biphenyls (PCBs) during the second quarter of 2009, following the issuance of our long-awaited permit. In April 2009, we received shipments from both the DOE’s Paducah Gaseous Diffusion Plant and CH2M HILL Plateau Remediation Company, the prime contractor for the DOE at the Hanford Site in Washington State. As the only authorized, commercial facility treating radioactive PCB wastes, we see this as a sizeable untapped market, and we look forward to the closure of the DOE’s TSCA incinerator, which is scheduled to begin later this year.
Our new onsite work at the DOE’s Hanford nuclear waste site continues to progress quite smoothly, and we recognized approximately $7.5 million of revenue from this subcontract during the first quarter of 2009. We anticipate the increased DOE budget will help to expand the scope of work both onsite at Hanford, as well as increase the offsite treatment revenues derived from this site.
Another new source of revenue for us in 2009 will be the treatment of characteristic hazardous wastes at our South Georgia facility. We completed construction and permitting for this process in April 2009 and are now ready to serve customers in the Southeast. The new system, designed around the Perma-Fix I process, eliminates the hazardous components within the waste using a chemical treatment process. This process substantially reduces the disposal costs, as well as the risks normally associated with characteristic hazardous waste. As the only regional provider of these services, we can also reduce transportation costs for our customers. As a result, we have received very favorable responses from regional hazardous waste generators in the Southeast and expect this to be a strong contributor to our Industrial Segment.
Our Industrial Segment was more profitable in the first quarter of 2009 versus the same period last year, despite a decline in revenue to $2.1 million from $2.6 million, due in part to the weak economy and lower oil prices. With the sale of three of our industrial facilities last year, this division accounted for less than 10% of our total revenue in the first quarter of 2009. The remaining industrial facilities have historically shown solid performance and are generating positive cash flow. Between the strength of our Nuclear Segment, as well as the stability and new opportunities in our Industrial Segment, we believe that we can continue to grow the overall business in 2009.
Financial Results
The increase in revenues was due to work which began on October 1, 2008, in relation to the CH Plateau Remediation Contract to clean up the DOE’s Hanford nuclear waste site. The revenue for the Nuclear Segment has raised to $19.1 million from $14.0 million for the same period 2008. The revenues for the Industrial Segment decreased to $2.1 million against $2.6 million for the same period in 2008 due primarily to reduced oil sale revenue and field service work due to the slow down in the economy. The revenues from Engineering Segment have declined to $779,000 against $902,000 for the same period in 2008. The operating income for the first quarter was $761,000 versus an operating loss of $14,000 for the same period in 2008. The net income in the first quarter of 2009 included a gain from discontinued operations, net of taxes, of $304,000 compared to a loss of $675,000 from discontinued operations, net of taxes, for the comparable period in the year-ago quarter. The net income for the first quarter of 2008 included a $2.1 million gain on the disposal of discontinued operations.
Perma-Fix had an EBITDA of $1.9 million for continuing operations for the first quarter of 2009, as compared to EBITDA of around $1.1 million for the same period of 2008. Perma-Fix defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in US (GAAP), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity.
