Perma-Fix Environmental Services - Earnings Call - Q1 2019
May 9, 2019
Transcript
Speaker 0
Greetings, and welcome to the Permafix Environmental First Quarter twenty nineteen Business Update Conference Call. At this time, participants are in a listen only mode. A question and answer session will follow the formal presentation. I would now like to turn the conference over to your host, David Waldman, Investor Relations. Please go ahead.
Speaker 1
Thank you, Hector. Good morning, everyone, and welcome to Perma Fix Environmental Services first quarter twenty nineteen conference call. On the call with us this morning are Mark Duff, President and CEO Doctor. Luz Zennifani, Executive Vice President of Strategic Initiatives and Ben Macpharado, Chief Financial Officer. The company issued a press release this morning containing first quarter twenty nineteen 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 including certain non GAAP financial measures. All statements on this conference call other than a statement of historical facts are forward looking statements that are subject to known and unknown risks, uncertainties and other factors that 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. 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.
Speaker 2
Great. Thanks, David. The first quarter was challenging due to several factors. But overall, we're very well positioned heading into the second quarter and the balance of this year. Starting with our Treatment Segment.
Revenue increased to $9,900,000 for the first quarter compared to $9,000,000 for the same period last year. We achieved these results despite roughly three weeks of very poor weather and shipment related delays at our Northwest facility as well as delayed in permit approvals due to the government shutdown around the first of the year. These issues are behind us heading into the second quarter and our backlog stood at approximately $9,900,000 as of March 3139. As a result, we're very encouraged by the outlook for our treatment segment. We've also concluded the cleanup at the MVC facility and are working to complete the final verification surveys.
While we're disappointed with how long this process has taken, we're now conducting the final verification process and working directly with the landlord in the state of Tennessee for release of the permits. We still expect this to happen later this quarter. As announced on our fourth quarter call a couple of weeks ago, we have completed testing demonstration of the GeoMelt vitrification unit at our Perma Fix Northwest facility and have now formally commenced commercial operations of the GML unit through a partnership with Veolia Nuclear Solutions. This new capability allows us to address a large inventory of reactive waste currently in storage and provides us a substantial multiyear backlog from a new and incremental waste stream. The government inventory of this waste stream is in excess of $100,000,000 The construction activities are continuing at our Perma Fixplore facility to accept and treat radioactively contaminated water and additional commercial waste streams as well.
We've begun to receive water treatment backlog inventories now and remain on track to commence operations through the summer. We also recently announced successful testing of our new patented and cost effective in ground separation technology for mercury contaminated soils. As a passive system, this process differs from current separation technology that requires soil removal and on-site or off-site treatment. The new system operates in ground by drawing the elemental mercury to a centralized collection point at at which time the mercury can easily be and cost effectively be extracted from the ground. As a result, the passive system has the potential to significantly lower life cycle remediation and treatment costs.
Based on some of the near term objectives within Department of Energy, mercury remediation technologies will play a key role in providing a comprehensive solution to be represented in several procurements over the next few years. Turning to the treatment segment excuse me, turning to the services segment, we experienced temporary weakness in Q1 due to the timing of projects. However, as previously announced, we've been awarded several substantial new projects, all commencing in the 2019. Each of these projects have now been signed, transitions have been successful, and we are progressing on schedule. In fact, few of these are actually growing.
We estimate the collective value of these contracts to be approximately 17,000,000 through 2019 alone. These contracts have significant potential growth in the future years as well. These wins include remediation work in Canada as well as several Department of Energy locations throughout The U. S. We believe these awards are a direct result of the improvements we made last year within our business development organization.
As a result, we're also bidding on a number of other additional large contracts and look forward to providing future updates in the next few quarters on those. So to wrap up, we're about two years into our strategic plan for growth. And while progress has been slower than anticipated, we remain optimistic about our future with the changes we've made to become more efficient and investments we've made to support growth. These changes beginning with the M and A closure have included expansion of treatment capabilities, enhancement of our marketing and sales programs and broadening our market base with voice receipts. Each of these initiatives have begun to support several increase excuse me, to support revenue increases in subsequent margin growth that will strengthen 2019 profitability.
As an example, we're starting to see the benefit of improvements we made last year through our business development organization as illustrated by the over $17,000,000 in contracts awarded in March alone. We're actively bidding on a number of additional large projects within both segments and look forward to providing further updates as these developments unfold on these procurements. On that note, I'll turn the call over to Ben, who will discuss the financial results in more detail. Ben?
Speaker 3
Thanks, Mark. Starting with revenue. Our total revenue from continuing operations for the first quarter was $11,700,000 compared to prior year of 12,700,000.0 Treatment Segment revenue increased by $946,000 or 10.6%, but was offset by the reduction in our Service Segment of $1,900,000 Winter conditions, as Mark noted, at our Northwest facility impacted the volume of incoming waste, the positive pricing and beginning backlog that provided for increased revenue in the segment. Our service segment was down due to minimal activity in our largest contract as we awaited the award of next phase, which was received in late March and began in April. The cost of sales was $9,200,000 down slightly from prior year costs of $9,300,000 Variable operating costs were down 723,000 due to the improved mix of treatment waste versus service revenue.
This increase, though, was offset by higher fixed costs related to payroll expense and closure costs. Our gross profit for the quarter decreased by $3,300,000 in Q1 from $3,300,000 in 2018 to $2,500,000 in 2019, a decrease of $820,000 or 24.7 percent. Our Treatment Segment gross profit was up $177,000 due to the increased revenue, while our Service Segment gross profit dropped by $997,000 due to the lower project revenue. Our SG and A costs for the quarter were $2,900,000 up slightly from 2,800,000.0 last year and primarily the result of higher bid and proposal expenses and increased payroll. Our loss from continuing operations net of taxes for the quarter was $550,000 compared to income of $253,000 last year.
We had a net loss attributable to common shareholders of $672,000 compared to last year's net income of $136,000 We had net loss per share for the quarter of $06 compared to net income per share of $01 in the prior year. Our adjusted EBITDA from continuing operations as we defined in this morning's press release was $67,000 compared to $789,000 last year. Turning to our balance sheet as compared to twelvethirty oneeighteen, our cash balance at the end of the year was $345,000 down from $812,000 at year end. The remainder of our current assets were fairly consistent with year end. We do have an operating right use of assets now on the books totaling $2,600,000 which represents the present value of our operating leases as a result of implementing the new lease accounting guidelines ASC eight forty two.
Our current liabilities also were relatively flat, including our unearned revenue, which decreased approximately $1,200,000 Our backlog of waste at the end of the quarter was approximately $9,900,000 which is down from 11,100,000.0 at year end, but up from 7,900,000.0 at the end of the 2018. Our total debt at the end of the quarter was $3,400,000 which is primarily owed to our credit facility, PNC Bank. And finally, I'll hit on a few cash flow numbers. Cash used by our continuing operations was 147,000 Cash used by discontinued operations was $182,000 Cash used for investing in continuing operations was $223,000 Cash provided for investing of discontinued operations was $25,000 and cash provided for financing was $137,000 which is made up of our monthly payments to the term loan of $3.00 4 net proceeds from the revolver of 365,000 and other lease financing of 76,000. With that, I'll now turn the call over to questions.
Speaker 0
Thank you. At this time, we'll be conducting a question and answer session. Our first question comes from the line of Anthony Marchesa, Private Investor. Please proceed with your question.
Speaker 3
Hi, guys. Question regarding, can you give us any update on or direct to anything that's publicly available on your work with the DOE?
Speaker 2
Well, probably about Because it's a better certification. Yeah.
Speaker 0
I'm sorry?
Speaker 3
Yeah. Yeah. With the I'm sorry. With the with the technology you have for the DOE. That's what I meant.
Speaker 2
Yeah. Right now, you have about 60% of our our revenues is through the Department of Energy. We have a lot of different technologies. If you're you're speaking about Hanford specifically
Speaker 0
Yes.
Speaker 4
Yes.
Speaker 2
Yeah. The TBI, what we call TBI, which is the test bed initiative, is ongoing, and they're making great progress. Most of the of the emphasis on on TBI right now is on the in tank extraction unit, And that that system process and associated permitting for that DUE and the other part of the team is managing. And that's on track. In fact, there's a there's a I think it's out for public comment now out of Hanford in regards to that system.
So to answer your question, things are moving forward. We're still anticipating receipt to begin receipt of that TBI waste, which is 2,000 gallons in the fourth quarter of this year.
Speaker 3
Okay, great. Thank you.
Speaker 0
Our next question comes from the line of Stephen Fine, Private Investor. Please proceed with your question.
Speaker 4
Good morning, How are you?
Speaker 2
Good morning. Good morning.
Speaker 4
I got a bunch of questions. One, let me understand the sales. So you're telling me you're saying you did 11.7 in the first quarter. You have a backlog of 10,000,000 in treatment, and then you have 17,000,000, which you have signed in service. So that's roughly about $38,000,000 on May 10 when you did $50,000,000 last year.
Now is that correct?
Speaker 2
Those numbers that you were yes, those numbers are correct.
Speaker 4
So if we prorate this and this keeps going this way, you're way ahead of last year?
Speaker 2
Absolutely. Particularly in regards to revenue, we're ahead of significantly ahead of last year with that $17,000,000 particularly that is all 2019 spend. We're significantly ahead of last year in revenue.
Speaker 4
So do you have a safe projection, I mean, like $6,070,000,000 dollars I mean, you've got to be exceeding the way you're going right now. And then with all the aside from the CVI, I mean, do you have any let's say, what I used to project, they used to go high, low and average. So was there an average expectation?
Speaker 2
Steve, I'm positive to do that because this business, we project the services business with funded backlog. Like these new contracts we have, we can clearly say we have $17,000,000 of funded backlog for this year. Projects are off and running. They're funded. They're rolling.
But what's difficult in this business is on the waste treatment side. And because even though we have $10,000,000 in backlog, when we say that, basically, we have $10,000,000 in inventory that we have contracts for, funded for, paid for in some cases. But you're dependent on a lot of things to continue those receipts through the year. So in other words, you don't have even though we're doing great compared to last year or we're sitting right now, a lot of things can happen. So I'm very hesitant to say that we're going to be dramatically higher overall than last year, but I would certainly anticipate a growth to be down 20% even if we just stayed on current path for revenue for the year that we're heading on right now.
We have a lot of outstanding bids, Steve, as we always do, but we've been doing better on them. And we're in a position now with a couple more of those bids coming through successfully, we're in a position for real growth. And hopefully, we can start realizing those wins and come out on top of those wins in the next couple of quarters.
Speaker 4
Yes. I didn't realize that the $17,000,000 was totally in service, the contract that you were signing in March.
Speaker 2
Yes, we were also Yes.
Speaker 4
Well, that's wonderful. One question. When you say that as of the March, you had $10,000,000 in treatment backlog, how much of that represents the GMO?
Speaker 2
Probably a the GMO the GMO inventory we have right now will go a couple years. So I would probably estimate that to be, for the rest of this fiscal year, between 1,000,000 and $2,000,000.
Speaker 4
Just 1,000,000 and $2,000,000?
Speaker 2
1,000,000 or $2,000,000 Yes. It's just what we have in backlog right now for that. Correct.
Speaker 4
And that sort of all you're going to do in D and L this year would be 1,000,000 to $2,000,000
Speaker 2
Left to see. And the reason is even though we have a good backlog of that, we're still in a treatability study mode. So while we're fully operational, it's not going as fast as we'd like, but it is going as fast as operationally designed right now.
Speaker 4
And that's only one that's only one area. No. I I mean, you know, when you look at everything alright. With regard to the the closing down of the plan, I'm so much confused on this. So I understand you made an accounting, you know, adjustment for the, you know, the 5,000,050 fund you'll get when you're done.
But when you're done, you're actually going to get it are you actually going to get any plus the $5,000,000?
Speaker 3
Yes. Yeah. But, Steve, we have about $16,000,000 that is of cash that collateralizes our closure at all of our plants. Right. It supports it supports the work an insurance policy in the event of any closure requirements.
When that plant is closed, our closure requirements at that plant alone are going to go down ballpark 11,000,000 or $12,000,000 of financial assurance requirements. And because of that, the company AIG that holds that collateral is releasing $5,000,000 of cash. So that is And that's on our balance sheet. It's classified right now under finite risk as a long term asset because generally, it's not liquid unless it's converting out. So that is expected in this quarter.
Speaker 4
So it's figured in, but it will just transfer this. It will go from one thing to cash?
Speaker 3
I'm sorry, say again? So is
Speaker 4
that so is the $5,000,000 can you hear me? Have earplugs on. So is the $5,000,000 included in EBITDA now? Or will it
Speaker 3
will not be included in EBITDA. It's just a shift from a long term asset to the capital. It.
Speaker 2
It. Where you'll see the
Speaker 3
Where you'll see the improvement improvement is in the working capital number.
Speaker 4
You'll see that. Right. But it's integrated in EBITDA right now?
Speaker 3
Correct. Well, it's not really it's not an income. It's cash that we've basically put us It's almost like an asset.
Speaker 4
Alright. Thank you. You will not
Speaker 3
see an EBITDA impact from this, an earnings impact. You'll just see liquidity improvement.
Speaker 4
Alright. Well, then, you know, so you'll have but you'll have physical cash?
Speaker 3
Correct.
Speaker 2
Correct.
Speaker 4
Okay. What is medical going away, period? I mean, I thought in the last quarter, know, for the last quarter, you know, you said you wrote off a lot of stuff because some assumptions, but I noticed there was still a a number there. So when are there going to be a total you know, you're saying the statement has been made that is that this project the medical project's being done by other people. So when are we not going to see any write off relative to medical?
Speaker 3
Medical is still we'll still be incurring some expenses in medical over time and it's constantly being reviewed. But with our present plan of where our partners are funding most of the work. So at this point, we're you'll still see over the short term some expenses. And Steve, while that analysis is ongoing, the net cash output from that segment right now is about $10,000 a month. So Okay. There's pretty
minimal spending. It's just maintenance. It's being a public company. There are certain accounting audit and legal costs we have to incur. But otherwise, everything is being done in these arrangements in that we set up with foreign these foreign countries where they're doing all of the research and development for nothing.
Speaker 4
When you made the statement, Mark when Mark made the statement that because of the bad weather, approvals were impacted. Can you address that?
Speaker 2
Yes. We had a lot of exemptions and transportation related permits for some of unique waste shipments. And they go through DOT and through through the regulatory community, and those were impacted by the government shutdown. And so they were delayed a couple months. So it just backed it just backed everything up into through the year and but it's just now starting to get loosened back up back to normal.
Speaker 4
Alright. The new technology that you're talking about with regards to mercury, when will that be commercialized, and what is the do you have any do you have any sense of the potential for that?
Speaker 2
It's difficult to it's difficult to find potential at this point, but because because it's it's unknown with all where all the opportunities are and how this will apply to all of them. The value that we bring to table on this is an upcoming procurements that are in the near term, in other words, one or two years, where we know there's mercury remediation so that's required. And this is a unique cost effective and very inexpensive approach to remediation of those soils to pull that mercury out. So it's difficult to answer your question, Steve, because until we see the procurement, until we see what the objectives are, define the applications, we're on the early side of that, and we'll start seeing that develop here with Oak Ridge first in the next year or so.
Speaker 4
So in other words, you go and you develop technology and you don't know the size of the market? I'm not being sarcastic. Mean, I'm presuming you have some sense of the size of the market when you go develop something.
Speaker 2
Yeah. We do. We do when we understand yeah. It's just difficult to put a number on it because we're not sure the the the extent that this technology will apply to all in other words, if there's mercury across the entire site, it's not gonna work for the entire site. It's hard to say how much it'll apply.
We're just not we're just not in a position at this point based on the fact there's procurement's going on and coming up to to put a number on it.
Speaker 4
Well, you know, it it it's still I mean, I I it's still as a I'm you know, I consider myself a reasonably technical person, and it just amazes me how you guys constantly, you know, develop these new things and and and so forth. Alright. So my favorite subject. So when are you gonna be awarded the time closure contract?
Speaker 2
Well, I'm pretty sensitive to talk about the procurement, Steve, at this point. Right now, the award is scheduled by the Department of Energy to be announced in early July or early in the third quarter and transition began in August. So we don't know anything between now and then, but that's their current schedule.
Speaker 4
So with regard to in the last call, you mentioned that there was a verbal presentation. Has that the oral presentation, has that been completed?
Speaker 2
That's been completed. It was completed in early April, and so now we wait.
Speaker 4
I see. So is there presuming you're in play here, or are there other do you go back in and, you know, have to explain yourself? I mean, it an ongoing process? Or is it now just a wait even as for the decision?
Speaker 2
Right now, it's pretty much awaiting for the decision, yes.
Speaker 4
All right. So I have another question. So you talked about that with regards to the CVI that you're really waiting for the machine that will provide you the 2,000 gallons. Now that machine is a separate machine from the machine that's being permitted that does larger amounts in the tank farm. Is that correct?
Speaker 2
That's correct.
Speaker 4
Okay. So my question is, presuming since you're saying you won't be finished this until you won't be finished the 2,000 gallons of CDI for the last quarter. So if for argument's sake, you were part of a consortium that won the patent closure, why couldn't you use the bigger machine to get your 2,000 gallons?
Speaker 2
That's a great question, Steve. I would I can't I'm afraid I just can't address anything associated with that. Fine. Alright. Well It's it's a blind question, though.
Speaker 4
Alright. Good. I'm I'm glad that's acknowledged. Alright. Well, you know, look.
There there this company, you know, the more and more I learn about your company, it's you know, you're obviously very esoteric. You're in a ditch. There aren't too many people who can do what you do, and and that's what has to be realized. And, you know, I I you know, frankly, I'd like to see you have a greater world footprint because the more and more I read about nuclear, it it seems like there's a lot going on in the world with this. And a part of the equation, if you're talking nuclear, has to be waste.
And you don't see enough discussion about that. So anyway, I would hope to see that your sales would keep going, and we have a real, real positive year this year. But anyway, keep on trucking, guys, and thanks.
Speaker 2
Great. Thanks, Steve.
Speaker 0
Our next question comes from the line of Steve Levinson with Big Rock Research. Please proceed with your question.
Speaker 2
Thanks. Good morning, Good morning.
Speaker 0
Just watching the investments that you've made in the water treatment, the soil separator and GeoMelt, I know you can't give a near term outlook. But can you give us sort of a 30,000 foot view on what the expected targeted returns are on those investments? And again, from 30,000 feet, I know it's not tomorrow, although did say the water treatment has commenced. A sort of timetable for when we might start seeing seeing things begin to pick up and ramp up.
Speaker 2
Well, Steve, it's difficult to address all those, but I mean, I can say this is is water, we're we're anticipating a 5 to $10,000,000 a year when we're at full production and revenue source. We are starting to get some bids out now where we can commit to processing. We had some delays with the state of Florida and some other issues at at that plant getting the system up and running. But now we're to the point where we can start putting bids in and be able to commit to processing. And so, you know, you won't get to those levels overnight, but you will hopefully within, you know, year a year or two once we start winning some of those awards and testing the market on our approach.
So overall, Steve, it's difficult to say because your brace comes in sporadically and it depends on the projects and the waste generated. But we do see growth overall in our waste treatment segment, adding new technologies, broadens that market and stabilizes it. And return on investments are typically very fast on these investments that we're making. In other words, we'll be able to pay off or return on or pay out our investment with just a few waste streams, sometimes one, sometimes three or four. So they're very quick and we just have to keep pounding away and implementing our marketing strategy.
Speaker 0
Okay. And is that specific to the soil or the GeoMelt or it's that sort of a mixed
Speaker 2
We still have a couple of soil soil segregation we mentioned a couple of calls ago. We still have a couple that did outstanding or in Huron. And so we're we're they're taking a much longer than anticipated.
Speaker 0
And The government acts slow when you want something
Speaker 2
from them. That's exactly right.
Speaker 0
When they want something from you. That's right. Okay. And I'm sorry. Any I know you mentioned Tech ninety nine.
Is there any update there? Is there any further testing or potential customers showing For
Speaker 2
yes. And Lou mentioned just now, as far as the medical side goes, Steve, right? Yes. As Lou and Ben were just saying, that's we slowed down the investment significantly and we're outsourcing a lot of the research and studies on this now. So Lou, do you have anything else you want to mention on that?
Speaker 3
No. We we basically still have three groups looking at it and, you know, we think with with their results should give us a very good idea if there's any value there. So at this point, we're looking waiting for results from them to see what they think of it.
Speaker 2
Okay. Thank you very much. Thank you.
Speaker 0
Our next question comes from the line of Wayne Miller, Private Investor. Please proceed with your question. Mr. Wayne Miller, your line is now live. Okay.
Please Thank you for taking my question. As I recall, the first well, the fiscal twenty eighteen year end conference call, which occurred after the quarter was over, the quarter sounded a lot more optimistic than what the results have turned out to be. I just have a question is how the hell can you not know what's going on after the quarter is over?
Speaker 2
So you're referring to the fact that Q1 did not turn out as good as it did As you were talking about
Speaker 0
it after it was over.
Speaker 2
Yes. Well, the bottom line is we had a lot more expenses this in Q1 than we anticipated, as we mentioned. We had some delays in shipments that had greater impact on the quarter. But it was already over.
Speaker 0
It was over on April 19.
Speaker 2
Yeah. We we we didn't see the impact to all the numbers until until we get we closed the court officially.
Speaker 3
Oh, and and and just to be sure, we we filed on April 1, not April 19. So it was over by a day.
Speaker 2
Okay.
Speaker 0
Well, it just seems that the conference calls are always more optimistic than the results that show up ninety days later. And that's enough said for me. Thank you. Our next question comes from Stephen Fine, Private Investor. Please proceed with your question.
Speaker 4
I have one more couple more things. My recollection of the last call, there really was no statement relative to what you had done because I asked that question and you really didn't have a sales number. I the thing I remember is, you know, you spoke about the 17,000,000 that you intended to you know, they were going to be signed. So, So basically, what I'm interpreting, well, with this past settlement thing is you didn't have the cost at that time when the cost came up to because I see the picture, Rosie, right? You're way ahead in projections of last year when you can sit and say, have this much and then you have the $17,000,000 My question, the reason my further question is, Mark, you had said that the 2,000 gallon thing should be done for the fourth quarter.
So presuming that's done in the fourth quarter, when would you expect a decision would be made relative to the final stage or moving forward? Do you have any sense of that?
Speaker 2
Steve, I don't have a sense of that. It depends on the tank closure contract. But even more so than that, it depends on the final funding approval for and this is this is funded through DOE technology development, and we haven't seen these final numbers for the final budget yet. So it depends on budgets. So I would anticipate seeing some clarity on that irrespective of tank closure in the next month or two.
Speaker 4
When we hear all these comments, like, for example, a couple a week or so ago, the President was talking to the head democrats and they were talking about putting up $1,000,000,000,000 for infrastructure. So when they talk about infrastructure, do they integrate waste into those discussions?
Speaker 2
This is all through Department of Energy. No. This is not associated with that.
Speaker 4
Yeah. Because, you know, to me, you know, having waistline around is the same as, you know, is the need, you know, is the same as you have your broken structure. So anyway, all right, thank you again.
Speaker 0
Our next question comes from the line of Tim Deacon, Private Investor. Please proceed with your question. Oh, can you hear me?
Speaker 2
Sure.
Speaker 3
Yes.
Speaker 0
Oh, okay. All right. So you talked about delays in shipments from the first quarter and so on and so forth. So at least some of these all these factors are behind you, right, now in the second quarter. And so we should get shouldn't we get a nice boost in sales and earnings in the second quarter because we've got all this stuff that was being carried over?
I mean, can you do you feel confident saying that second quarter this year is going to be substantially better than the second quarter of last year?
Speaker 2
What I can say, Tim, is that our second quarter is looking significantly increasing over Q1 in revenue, and we've got real momentum heading into Q3. So all these projects you're talking about are ramping up. As you mentioned, the shipments are jammed up a little bit. They all kind of split out. Some will be realized, some of those delays will be realized in Q2 and some Q3.
But we're looking at very strong revenue increases, obviously, with these new projects, but also a couple of initiatives that we're very excited about by
Speaker 0
Q2 You've and got some delays that you're making up from first quarter and then plus you've got these additional $17,000,000 in new contracts. So I mean, all of this should give you quite a boost, right, in the second and third quarter?
Speaker 2
We're very optimistic, Tim, for both this quarter as to be as you realize it could Yes.
Speaker 0
I think that last quarter, it seemed like your investors were enthused and but now they're disappointed. You guys have to, you know, instill some confidence in in, you know, in the investment community. I don't know. I mean, you gotta get this this company back on track. Don't Yeah.
Tim, we
Speaker 2
were I'm very sensitive to that. We really are, and the whole management team is. And that's why we're very hesitant to speculate too much until we start showing the numbers.
Speaker 0
And Yeah. I think it's it's important to build credibility here. I mean, you you do presentations. You go around and do presentations to different groups and but Mhmm. You know, at the end of the day, you gotta put up the numbers.
Speaker 1
That's right.
Speaker 0
That's That's what the world turns on. Okay. Well, listen, that's all. I just wanted to make a comment. All right.
Good. Thank you.
Speaker 3
You.
Speaker 0
Ladies and gentlemen, we have reached the end of the question and answer session. And I would like to turn the call back to Mark Duck for closing remarks.
Speaker 2
Great. I'd like to thank everyone for participating in our first quarter conference call. As mentioned earlier, our treatment Segment continues to grow with approximately $9,900,000 in backlog as of March 31. With our Services Segment, we recently awarded $17,000,000 in new contracts and are bidding on many more right now, several which could be suspended from the award this year. So overall, we remain extremely encouraged by the outlook for the business and look forward to providing further updates in the next quarter.
Thank you.
Speaker 0
Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.