Why is PESI moving?

2/3/23 EDIT: See this updated post from Aaron Warwick as a result of his conversation with management of PESI

Perma-Fix (PESI) made a huge move yesterday and today, running from $4.00 to as high as $4.80/share today on heavy volume for the stock. The reason for this seems to be that the Department of Energy on 1/31 released their final report on the Hanford site cleanup. You can view that here.

In short, this final report has PESI's name all over the place! Most importantly, it indicates the DOE's expectation for PESI's Northwest Facility ("PFNW" is the acronym used in the document) to treat 8,300 cubic meters (2.2M gallons) annually during the Hanford site cleanup, which will take decades to complete. What does that mean for PESI? Well, our best estimate is that PESI would earn around $150M of revenue annually for that work ($70/gallon) at high margin, leading to $100M of estimated gross profit. As a reminder, PESI is currently a $100M revenue company. They should require relatively little capex and opex increases to process this business.

The final important item to note is simply that the DOE is moving forward on Hanford. In previous conference calls, PESI's CEO, Mark Duff, indicated that everyone was waiting on the DOE's final report to start proceeding. With that in mind, and with this final report issued, we would expect to see an award for the $45B ITDC contract in the near future. The current expectation is that the contract will be awarded to one of two bidding conglomerates by EOQ1 '23. This final report seems to indicate that timeline still exists. In any case, the fact that DOE is now moving forward on Hanford is extremely positive news for PESI because as soon as the cleanup begins, PESI benefits.

Breakout Investor, Aaron Warwick, has a call on Friday morning with PESI's CEO, Mark Duff. Any important updates from that call will be shared on the Breakout Investors platform.