Forward-looking Statements
Certain statements contained within this report 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 report other than a statement 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. The words "believe," "expect," "anticipate," "intend," "will," and similar expressions identify forward-looking statements. Forward-looking statements contained herein relate to, among other things,
? demand for our services; ? reductions in the level of government funding in future years; ? reducing operating costs and non-essential expenditures; ? ability to meet loan agreement quarterly covenant requirements; ? cash flow requirements; ? Canadian receivable; ? sufficient liquidity to continue business; ? future results of operations and liquidity; ? effect of economic disruptions on our business; ? government funding for our services; ? may not have liquidity to repay debt if our lender accelerates payment of our
borrowings;
? deployment of unit; ? manner in which the applicable government will be required to spend funding to remediate various sites; ? funding operations; ? continued increases in pricing and/or further tightening supply chain; ? fund capital expenditures from cash from operations and/or financing; ? impact from COVID-19 and impact from other delays; ? improvement in waste shipments; ? fund remediation expenditures for sites from funds generated internally; ? collection of accounts receivables; ? compliance with environmental regulations; ? potential effect of being a PRP; ? potential sites for violations of environmental laws and remediation of our facilities; 21 ? remediation of material weakness; ? future price increases; and ? continuation of contracts with federal government.
While the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance such expectations will prove to be correct. There are a variety of factors, which could cause future outcomes to differ materially from those described in this report, including, but not limited to:
? general economic conditions; ? contract bids, including international markets; ? material reduction in revenues; ? inability to meet PNC covenant requirements; ? inability to collect in a timely manner a material amount of receivables; ? increased competitive pressures;
inability to maintain and obtain required permits and approvals to conduct ? operations; ? public not accepting our new technology;
inability to develop new and existing technologies in the conduct of ? operations; ? inability to maintain and obtain closure and operating insurance requirements; ? inability to retain or renew certain required permits; ? discovery of additional contamination or expanded contamination at any of the
sites or facilities leased or owned by us or our subsidiaries which would
result in a material increase in remediation expenditures; ? delays at our third-party disposal site can extend collection of our
receivables greater than twelve months; ? refusal of third-party disposal sites to accept our waste; ? changes in federal, state and local laws and regulations, especially
environmental laws and regulations, or in interpretation of such; ? requirements to obtain permits for TSD activities or licensing requirements to
handle low level radioactive materials are limited or lessened; ? potential increases in equipment, maintenance, operating or labor costs; ? management retention and development; ? financial valuation of intangible assets is substantially more/less than
expected;
? the requirement to use internally generated funds for purposes not presently
anticipated;
? inability to continue to be profitable on an annualized basis; ? inability of the Company to maintain the listing of its Common Stock on the
NASDAQ;
? terminations of contracts with government agencies or subcontracts involving
government agencies or reduction in amount of waste delivered to the Company
under the contracts or subcontracts; ? renegotiation of contracts involving government agencies; ? federal government's inability or failure to provide necessary funding to
remediate contaminated federal sites; ? disposal expense accrual could prove to be inadequate in the event the waste requires re-treatment; ? inability to raise capital on commercially reasonable terms; ? inability to increase profitable revenue; ? impact of the COVID-19; ? delays in waste shipments and delay in activities under new contracts; ? new governmental regulations; ? lender refuses to waive non-compliance or revise our covenant so that we are in
compliance;
? continued supply chain interruptions; ? continued inflationary pressures; ? other unanticipated factors; and ? risk factors and other factors set forth in "Special Note Regarding
Forward-Looking Statements" contained in the Company's 2021 Form 10-K and the
"Forward-Looking Statements" contained in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" ("MD&A") of this
first quarter 2022 Form 10-Q.
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COVID-19 Impact and Impact due to Other Delays
Our first quarter financial results continued to be impacted by COVID-19. As previously disclosed, within our Services Segment, we experienced delays in procurement actions and contract awards during the first half of 2021 resulting from the impact of COVID-19. Since the end of the second quarter of 2021, we were awarded a number of new contracts. However, due to continued COVID-19 impact and/or customer administrative delay experienced by certain customers, work under certain of our new awards was temporarily curtailed/delayed which continued for most of the first quarter of 2022 and negatively impacted revenue. We have, however, begun to see improvement in activities from certain of these new projects starting in the latter part of the first quarter of 2022. Our Treatment Segment revenue continues to be negatively impacted by continued waste shipment delays from certain customers since the latter part of the first quarter of 2020, the start of the pandemic. We expect to see a gradual improvement in waste receipts from these customers in the upcoming months as our customers start easing up on COVID-19 restrictions; however, such may not be the case based on our customers' own responses to COVID-19, including, but not limited to delaying or limiting full return-to-work schedules. Additionally, as a result of supply chain challenges, we experienced a delay in the delivery of a new technology waste processing unit from our supplier which negatively impacted our revenue as associated revenue was not able to be generated. Delivery of this unit had been expected during the third quarter of 2021 but did not occur until the latter part of the first quarter of 2022. Deployment of this unit is expected to commence in the second quarter of 2022. Within our Treatment Segment, we are experiencing a large increase in proposal requests. We continue to have bids currently submitted in both segments and awaiting awards.
At this time, we believe we have sufficient liquidity on hand to continue
business operations during the next twelve months. At
We are closely monitoring our customers' payment performance. However, since a significant portion of our revenues is derived from government related contracts, we do not expect our accounts receivable collections to be materially impacted due to COVID-19.
As the situations surrounding COVID-19 continues to remain fluid, the full impact and extent of the pandemic on our financial results and liquidity cannot be estimated with any degree of certainty. We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including supply chain challenges, our labor force and increasing costs from inflationary pressures (see "Known Trends and Uncertainties" - "Supply Chain" and "Inflation and Cost Increases" within this MD&A).
23 Overview
Revenue decreased by
Business Environment
Our Treatment and Services Segments' business continues to be heavily dependent
on services that we provide to governmental clients, primarily as subcontractors
for others who are prime contractors to government entities or directly as the
prime contractor. We believe demand for our services will continue to be subject
to fluctuations due to a variety of factors beyond our control, including,
without limitation, the economic conditions, the manner in which the applicable
government will be required to spend funding to remediate various sites, and/or
potential further impact from COVID-19. In addition, our governmental contracts
and subcontracts relating to activities at governmental sites in
We are continually reviewing methods to raise additional capital to supplement our liquidity requirements, when needed, and reducing our operating costs. We continue to aggressively bid on various contracts, including potential contracts within the international markets.
Results of Operations
The reporting of financial results and pertinent discussions are tailored to our
two reportable segments: The Treatment and Services. Our financial results for
2021 also included our Medical Segments. As previously disclosed, we made the
strategic decision to cease all R&D activities under the Medical Segment and
sold 100% of our interest in PFM Poland (which comprised the Medical Segment) in
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