A Nuclear Services and Waste Management Company Investor Presentation - - PowerPoint PPT Presentation

Investor Presentation – March 2017 Nasdaq: PESI A Nuclear Services and Waste Management Company

Safe Harbor

• Certain statements contained within this presentation may be deemed “forward-looking statements” within the meaning of

Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the “Private Securities Litigation Reform Act of 1995"). All statements in this presentation other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and

• ther factors which could cause actual results and performance of the Company to differ materially from such statements.

The words “believe,” “expect,” “anticipate,” “intend,” “will,” and similar expressions identify forward-looking statements. Forward-looking statements contained herein relate to, among other things,

– the Company’s ability to develop or adopt new and existing technologies; – anticipated financial performance; – growth through acquisition; – leader in the mixed waste industry; – positioned to benefit from mixed waste market opportunities; – geographic strongholds; and – all other statements which are not statements of historical fact.

• While the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no

assurance such expectations will prove to have been correct. There are a variety of factors which could cause future

• utcomes to differ materially from those described in this report, including, but not limited to:

– general economic conditions; – increased competitive pressures; – the ability to maintain and obtain required permits and approvals to conduct operations; – the ability to develop new and existing technologies in the conduct of operations; – changes in federal, state and local laws and regulations, especially environmental regulations, or in interpretation of such; and – the commercial viability of our on-site treatment process.

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Company Overview

Leveraging core assets to become a leader in the nuclear industry.

3 NASDAQ: PESI Treatment Services Medical

Nuclear

4

Nuclear Treatment Facilities

Perma-Fix Florida - Gainesville, FL DSSI - Kingston, TN Perma-Fix North West - Richland, WA

5 NASDAQ: PESI Three unique and irreplaceable facilities

Waste Treatment

• Perma-Fix is a leading provider of nuclear waste treatment services

– Perma-Fix specializes in treating nuclear wastes – Waste generated by commercial customers, utilities, hospitals, research facilities, and the government

• DOE is the largest generator of nuclear waste

– Legacy waste dating back to Manhattan Project – Massive quantities accumulated during Cold-War – Federal, state and local communities mandate for the treatment of this waste

• Strong and long-standing relationships with key government agencies

including DOE, NRC, and NNSA

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Primary Markets - Nuclear

• Department of Energy

– Over 1000 legacy nuclear excess facilities – $17B budget (EM and NNSA)

• Department of Defense

– Base realignment and closure – Threat reduction – FUSRAP

• Commercial Nuclear

– 104 in the United States – 423 worldwide – Increase by 90-230 new reactors by 2020

• International

– Global nuclear waste and service markets in N. America, Europe, & Asia 7 NASDAQ: PESI

Massive Barriers to Entry

• Highly regulated at State and Federal levels

– Nuclear Regulatory Commission through State regulators – Environmental Protection Agency through State regulators – State Regulators for other air and water permits

• Technology

– Patented and proprietary chemical treatment process – Treatment of nuclear waste is complex and requires multiple technologies and multiple steps

• Experience

– Unparalleled experience and track record of facilities successfully treating nuclear waste 30+ years 8 NASDAQ: PESI

Nuclear Services

• Services group provides waste personnel and capabilities on client’s sites for a

variety of industrial and government clients

– Major contracts with Department of Energy facilities – Expansion into commercial and international helping diversify revenue

• Capabilities include health physics and

remediation of nuclear materials for the DOE, DOD, federal agencies and commercial customers, including:

– FEMA – Army Corps of Engineers – Bechtel Companies – UK Government

Today, under the direction of the U.S. DOE, Hanford is engaged in the world's largest environmental cleanup project; Expected to continue until 2030 and cost over $100 billion

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Financial Results

10 Return to growth & profitability; achieved adjusted EBITDA* of $7M for FY 2015

*Adjusted EBITDA is defined as EBITDA before R&D costs related to the Medical Isotope project in 2014, and impairment loss on goodwill and cost in excess

• f revenue and amortization of acquired contracts in the applicable periods.

NASDAQ: PESI

$64,553 $92,393 $97,790 $118,610 $127,509 $74,413 $57,065 $62,383 $5,029 $13,799 $10,749 $16,500 $3,349 $(1,252) $3,719 $6,975

$(20,000) $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2008 2009 2010 2011 2012 2013 2014 2015 Revenue

• Adj. EBITDA

Q3 2016 Financial Results & Guidance

• Revenue for the third quarter of 2016 was $12.9 million versus $17.3 million for

the same period last year

– Revenue for the Treatment Segment was $7.6 million compared to $10.9 million for the same period in 2015 due to lower waste volume – Revenue from the Services Segment was $5.3 million versus $6.4 million for the same period in 2015

• Achieved Adjusted EBITDA $152,000 despite continued delays of waste shipments

within the Treatment Segment

• Anticipate improvement in revenue and cash flow in Q4 and 2017 as waste that

was delayed has begun to ship

• Continue to look at all aspects of the business from a cost standpoint

– Proceeding with the planned shutdown of M&EC facility, which should save an estimated $2 to $3 million annually – Currently anticipate adjusted EBITDA for Q4 2016 of $1M million

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*Adjusted EBITDA is defined as EBITDA before R&D costs related to the Medical Isotope project in 2014, and impairment loss on goodwill and cost in excess

• f revenue and amortization of acquired contracts in the applicable periods.

NASDAQ: PESI

Perma-Fix Medical S.A. (PFM)

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Business Summary

Disruptive technology to produce the most commonly used medical isotope in the world – Technetium-99m (Tc-99m) Leading institutions in North America & Europe have validated the process Strong intellectual property portfolio 40% of current N.A. supply chain for Tc-99m will be eliminated in 2016 Highly scalable business model leveraging strategic partners

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Isotope Market Overview

• Tc-99m is the most widely used medical isotope in the world

– Allows medical practitioners to image internal body organs – Used in 80%-85% of the 25M diagnostic nuclear medical procedures each year – Common procedures include:

• cardiac imaging
• cancer detection bone scans
• The radioisotope market in Europe alone is expected to reach $1.6B

in 2017, up from $1.1B in 2012

– Nearly all of the world's supply comes from the thermal fission of highly enriched uranium (HEU) targets in a small number of highly specialized reactors – Current process is costly and unreliable; raises serious proliferation concerns

 gastrointestinal issues  Imaging of the brain, kidney, spleen and infections

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Supply Chain Elimination – A Perfect Storm

• Beginning in 2016, the National Research Universal (NRU) reactor in Canada

will no longer receive government funding for isotope production

– 40% of the supply of Tc-99m in North America derived from this one reactor (referred to as the Chalk River Reactor)

• The OSIRIS reactor in France is also scheduled to close in 2018
• Without an alternative source of Tc-99m, these planned shut downs will put

billions of USD in medical procedures at risk

Chalk River, ON

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Isotope Production

• Completed initial development of new process to produce Tc-99m for

medical diagnostic tests

 Expected to solve worldwide shortages of Tc-99m  Far less expensive process  Does not require the use of government-subsidized, weapons-grade materials  Designed to improve safety and security of radioactive materials

• Process encompasses full production cycle: reactor to final medical supply

 Easily deployed worldwide using standard research and commercial reactors  Eliminates the need for special purpose reactors  Stabilizes the worldwide supply of Tc-99m by decentralizing production 16 WSE: PFM

Proprietary Production Process

Source natural molly Purify molly Irradiate in standard reactor Insert into Generator Extract Technetium

Perma-Fix Medical Patented Technology

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Isotope Production

Current Uranium Process* Perma-Fix Molybdenum Process*

*Source: NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

= =

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N

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Patents & Licenses

• In January 2015, the US Patent Office issued patent to Perma-Fix

Environmental Services, Inc. – Allowed all claims in the key patent application – Composition of matter and use patent

• Additional patents underway
• Third-party license agreements in place

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Technology Validation

• First set of independent tests conducted at POLATOM, the national center

for nuclear research in Warsaw, Poland

– Reaffirmed previous testing

• Second set of tests conducted at the Missouri University Research Reactor

(MURR) in Columbia, Missouri, USA

– Demonstrated higher elution efficiencies

Independent testing validates strength of the technology

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Key Milestones

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Successful testing at POLATOM and MURR US PTO Notice

• f Allowance

Establishing strategic partnerships Demonstration

• f resin/

prototype generator Applications for FDA & CE approval

Completed Near Term Goals Underway

Value Proposition

Winner Perma-Fix Uranium Reliable global supply chain

 

Environmentally friendly

 

Eliminates proliferation risk

 

Flexibility in multiple reactor types

 

Non government subsidized

 

Cost effective

 

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Strategic Investor – October 2016

• Entered into a letter of intent with a private investor for the purchase of

up to $10 million of Preferred Shares in Perma-Fix Medical Corporation

– Shares would be issued at $8.00 per share – Upon closing, investor could own approximately 48.6% of PFM – Investor would also receive warrants to purchase three quarters (.75) of one share of PFM for each share of Preferred Stock at an exercise price of $9.00 – In addition, at closing, PESI would receive warrants to purchase up to 183,606 shares of PFM common stock at an exercise price of $14.00 per share.

• The proposed financing to should provide sufficient funding to execute

the strategy through to commercialization of the Tc-99m technology

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Business Summary

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Investment Highlights

 Turnaround and return to profitability  Significant and undervalued asset base

• 3 unique and irreplaceable facilities
• $21.5M of cash securing regulatory closure requirement
• Own 60.5% of a public medical isotope business trading on the Warsaw Stock Exchange

 Positioned to be a leader in multi-billion dollar nuclear services market  Nearly insurmountable barriers to entry  Sufficient capacity to support future expansion and improved profitability  Disruptive medical isotope production technology; positioned to be the major supplier in a multi-billion dollar industry

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*Adjusted EBITDA is defined as EBITDA before research and development costs related to the Medical Isotope project (prior year definitions may vary)

NASDAQ: PESI

Executive Management Team

• Dr. Louis Centofanti, Chief Executive Officer & Director, joined Perma-Fix in 1991. Founded PPM, Inc.,

a hazardous waste management company. PPM’s revenues grew to $15 million at which time it was sold to

• USPCI. Under Dr. Centofanti’s leadership (Senior Vice President), USPCI was sold for $600 million (2 years

after purchase of PPM). Served as senior official to the U.S. Department of Energy under the Carter Administration.

Ben Naccarato, Chief Financial Officer, joined Perma-Fix in 2004. He brings 24 years experience in senior

financial positions in the waste management and used oil industries. Previous positions include Chief Financial Officer for Culp Petroleum Company Inc, a fuel distribution and used waste oil company and Director of Financial Planning and Analysis with Safety-Kleen Corp.

Mark Duff, Executive Vice President/Chief Operating Officer, 30 years of experience in the DOE &

DOD environmental and construction markets. For the past five years, Mr. Duff has been responsible for the successful completion of over 70 performance-based projects at the Paducah Gaseous Diffusion Plant (PGDP), KY overseeing a five-year project with a total value of $458 million. Prior to the PGDP project, Mark was a senior manager supporting Babcock and Wilcox (B&W).

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Key Statistics

NASDAQ: PESI Current Price: (3/7/2017): $2.95 Shares Outstanding: 11.7 M Market Cap: $34.5 M Fiscal Year End: December 31 Inside Ownership: 5.84% 27 NASDAQ: PESI

28 A Nuclear Services and Waste Management Company

Thank you

For additional information: David K. Waldman or Natalya Rudman Crescendo Communications, LLC Tel: (212) 671-1021 Email: PESI@crescendo-ir.com