Digging further into this company, Yahoo posted this Open Letter
Wednesday October 1 11:50 AM EDT
Company Press Release
Perma-Fix Environmental Services Inc. Open Letter to Shareholders
GAINESVILLE, Fla.--(BUSINESS WIRE)--Oct. 1, 1997--
Dear Shareholder:
During the first nine months of 1997, we have aggressively pursued repositioning Perma-Fix Environmental Services Inc. as a major player in two markets: nuclear mixed waste and wastewater treatment. The company is now beginning to reap the rewards of this strategy.
Our wastewater treatment business continues to grow and generate consistently strong revenues and cash flow. In addition, we have made great strides during the past nine months toward establishing Perma-Fix in the fast-growing, potentially very lucrative nuclear and mixed-waste markets.
Huge Market Potential
The U.S. Department of Energy (DOE), which is responsible for cleaning up radioactive materials generated by the buildup of weapons production facilities during the Cold War, estimates the cost to clean up these facilities will run close to $227 billion over the next two decades. There are approximately 16 major contaminated sites and dozens of others nationwide, covering thousands of square miles.
To break into this market, we have formulated a strategy of bidding on small contracts that our competitors cannot afford to pursue. We are able to do this because our proprietary treatment processes, Perma-Fix Process I and II, are far more economical than the processes utilized by our competitors. Independent tests have also proven that our processes are safer. These smaller contracts will acquaint potential customers with our expertise and ultimately position us to bid on larger contracts.
1997 Highlights
As evidence of our progress to date this year, let me highlight some of our important developments:
-- In the third quarter, we have received new mixed waste contracts valued at approximately $1 million
-- On Aug. 19, we unveiled Perma-Fix II, a non-thermal hazardous waste treatment process developed specifically to treat organic waste. This process has broad application in the nuclear, biological and chemical weapon destruction and general waste markets
-- all multi-billion dollar markets. Initially we will focus the process on nuclear and hazardous mixed waste, but the process has the potential to move us into new markets. We have signed an agreement with the U.S. Department of Energy's Lawrence Livermore Labs to help further develop the process.
-- On Aug. 25, we began construction of a 1,200-ton-per-year commercial waste treatment unit in Gainesville where we will run pilot projects using Perma-Fix II.
-- On June 23, we were awarded a $600,000 contract from Lockheed Martin Energy Systems Inc., representing the Army's Defense Logistics Agency, to treat radioactive thorium nitrate presently being stored at Army storage facilities. The eventual cost to treat the Army's total stock pile is estimated at $30 million.
-- On April 23, we negotiated a lease agreement with the DOE and are currently establishing a mixed nuclear waste treatment operation at the DOE's Oak Ridge, Tenn. site. The eventual cost to clean up the entire Oak Ridge site is estimated at $5 billion over the next 20 years. As the only provider of nuclear waste treatment services with a facility on site, Perma-Fix is well positioned to bid on future Oak Ridge contracts.
-- On Feb. 6, we announced the completion of the treatment of 22,000 lbs. of radioactive thorium nitrate at the DOE Fernald, Ohio, facility. We have been awarded a total of three contracts at this site for an approximate value of $3 million.
Positive Outlook
Looking at our core businesses, we project steady growth in our focus areas. We have a very significant, steady cash flow generated by our wastewater and commercial nuclear waste treatment operations. In the coming months, we will continue to make capital investments in these operations. In addition, we have made a commitment to continued research and development, particularly in the area of nuclear and mixed waste treatment.
Although our 1997 earnings were negatively affected by a fire at our Memphis facility, we expect to recoup a portion of these losses through insurance claims. During September, we settled the Memphis property and contents portion of the claim, and we are currently negotiating the business interruption insurance, which may also be recoverable as a result of this loss.
With the negative short-term effects of the Memphis facility fire behind us and long-term positive trends at work within the company, we are confident that 1998 will reflect the anticipated performance and growth resulting from such events.
Sincerely,
Dr. Louis F. Centofanti Chairman and President |
