Perma-Fix Environmental Services, Inc. (PESI) Earnings Call Transcript

Good day, ladies and gentlemen, and welcome to the Perma-Fix Environmental Services Fiscal Second Quarter 2026 Earnings Conference Call. [Operator Instructions] And please note, this conference call is being recorded. I will now turn the conference over to your host, Mr. David Waldman with Crescendo Communications. Sir, the floor is yours.

Thank you, Oli. Good afternoon, everyone, and welcome to Perma-Fix Environmental Services Second Quarter 2026 Conference Call. On the call with us this afternoon are Mark Duff, President and CEO; Dr. Lou Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this afternoon containing second quarter 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 include certain non-GAAP financial measures. All statements on this conference call other than statements 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. These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission as well as this afternoon'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.

All right. Thanks, David, and good afternoon, everyone. Thank you for joining us. I want to start by being direct about the quarter. Our second quarter financial results were below expectations. Revenue was $12.9 million, and we reported a net loss of $6.2 million. That is not the quarter we wanted to deliver, and I am going to walk you through exactly what happened and why. But I also want to be clear about something the second quarter delivered the operational milestones we've been working for, for years. And those milestones, not this quarter's results are what will define where the company is headed. Yesterday, the Department of Energy's Hanford Tank Contractor, H2C, announced the award of the master IDIQ for tank waste operations and closure for grouting and disposal to support the tank retrieval and disposition mission at the site. This mission is one of the most important programs within DOE's Office of Environmental Management and reflects this administration's priority to accelerate the removal of risk associated with the 56 million gallons of waste stored in the tanks at Hanford. The contract carries a maximum value of approximately $4.4 billion with task orders eligible to be issued from 2027 through 2041. And to be clear, that is a ceiling shared among all subcontract holders, not an amount awarded or committed to Perma-Fix. The program is supported by the tri-party agreement with the state and federal regulators to remediate 22 tanks from the West -- 200 West Tank area during that period. In addition, the contract was modified during the RFP process to include other tank and liquid waste streams to provide a contract vehicle for the 200 East Tank area as a supplement to the DFLAW program. While this award is an IDIQ contract vehicle, it will be used by H2C to issue task orders for specific volumes of waste to be dispositioned within the defined periods. H2C also awarded master sub contracts to two other companies, both located out of state. Perma-Fix Northwest is the only facility of the three where these liquids can be grouted near the point of generation without long-haul transport of liquid tank waste. Our Perma-Fix Northwest facility located about a mile from the Hanford site will provide the capacity to meet the goals for tank retrieval and liquid waste processing as the program grows to meet the DOE EM goals and objectives. We've been preparing for this program for some time, upgrading our facilities, procuring large-scale treatment equipment, expanding our workforce through hiring and training and acquiring the rail line parcel that connects Perma-Fix Northwest to the Port of Benton shortline railroad for rail -- for direct rail shipments of treated waste. Under the performance work statement for the contract, we are required to maintain the capability to treat and dispose of pretreated tank waste at the rate of 100,800 gallons per week over a seven-week period. When annualized, this level is well above our current permanent annual capacity. And that is why we're expanding our current permit that I'll discuss in a moment, which is already underway to support the task orders that will be eligible for beginning in January. Let me turn to why we're confident about the second half and beyond. DOE has adopted what it calls the Hanford dual glass-plus-grout strategy. In DOE's own framing, grouting is a proven technology already approved under the Hanford Holistic Agreement and the Savannah River site has also treated 13 million gallons of tank waste inventory in the same way. DOE projects the approach will deliver up to 300% more throughput while reducing treatment and disposal costs from roughly $1,200 per gallon to under $50 per gallon in contrast to vitrification costs. DOE has presented a dual path strategy to stakeholders specifying Perma-Fix Northwest as the grouting provider for the EMF secondary waste effluent stream, which is the -- material we're receiving today. The H2C contract awarded yesterday will likely be used as a contract vehicle for the EMF beginning in January when the contract becomes active. On volumes, I want to be precise because these numbers get quoted loosely. The glass-plus-grout approach includes acceleration of tank retrieval operations at 100,000 gallons per month using the existing TSCR. In case you don't know,0020the TSCR is the tank side cesium removal system, which is an ion exchange system, which removes the radioactive component of cesium, most of it from the waste stream. And that TSCR is a critical part to pulling the waste out of the tanks currently. By 2020 [Audio Gap]

Apologies, ladies and gentlemen, we appear to have lost our speaker's line. One moment please while he reconnects. I'm not entirely sure our speaker is aware that his line has dropped at the moment, so please bear with us.

Okay. I'm not sure. My apologies. I was not aware that I had dropped off. I'm not really sure where I.

Start at where you were discussing the TSCR.

Okay. All right. So explained what the TSCR was, I assumed, which is the tank side remediation removal system, which is currently capable of treating or pulling out and retrieving about 100,000 gallons per month for the -- to be loaded in the AP-106 tank. By 2028, the advanced modular -- pretreatment system, also known as AMPS will be operational reaching a total of 300,000 gallons per month of pretreated tank waste to be shared between the grouting program and the DFLAW facility for treatment. The DFLAW storage tank, again, known as the AP-106 is currently in capacity at over 1 million gallons. So the store pretreated waste can be available for grouting while leaving ample feed for DFLAW operations without a constraint. As inventories are reduced through treatment, the TSCR can replenish the AP-106 at about 100,000 gallons per month through 2027. DOE estimates that roughly 60,000 gallons per month will be available from the AP-106 tank for grouting beginning as early as Q4 of '26, increasing to approximately 130,000 gallons per month by 2028. Here's the point I want to make here. At 60,000 gallons a month, we are inside our existing permitted grouting capacity of 1.2 million gallons per year. Perma-Fix continues to develop and design technology to expand our capabilities with a specific goal of ensuring that -- our Perma-Fix Northwest plant can accept and process the full volume of waste Hanford provides for grouting, treated locally and shipped by rail for disposal and in contrast to our competitors, which will be transporting liquid waste on public highways for treatment and disposal out of state. That expansion is what we need the West -- that expansion is what we need the West Area tank program, which is -- will support the West Area tank program, which is a separate and substantially larger opportunity. Across both the East and West Tank areas, DOE totals are targeted to reach 9 million gallons annually by 2030, 9 million gallons of pretreated waste to be grouted annually. Perma-Fix Northwest has submitted a permit modification request to the State Department of Ecology and is working with these regulators to expand our grouting permit from its existing annual capacity of 1.2 million gallons per year to the levels that meets DOE objectives for both the East side and the West Side tanks. The facility is in final design and procurement for the upgrades needed to achieve that expanded capacity, which should be ready by the third quarter of 2027. One development worth noting, the H2C procurement decision moved forward through this process in regards and awarded for an off-site treatment path rather than construction of a new on-site facility, which was included as an alternative within the H2C RFP. Consistent with that, on June 29, DOE notified the State of Washington of Ecology that its near-term selection for treating 200 West Area tank waste is off-site commercial treatment with transport by truck rail or both. This is a favorable development for a facility positioned as we are. Perma-Fix Northwest sits immediately adjacent to the Hanford site. We're permitted today, we're operating today, and we're receiving Hanford tank waste today for grouting. There's no facility to design or build and no facility to commission. For DOE, that means a treatment path that is available now rather than years from now, the shortest possible transport of liquid waste and no government capital outlay to get there. We believe the combination is difficult to replicate. It's also a distinction worth drawing between grouting near Hanford and shipping this waste material out of state for treatment. Under our approach, the waste is solidified in Richland and only stabilized grout travels on public roads out of state. It leaves Washington as a solid in a form that cannot leak. The alternative is a long-haul transport of liquid tank waste across multiple states through treatment facility in Texas or Utah. Oregon and regional stakeholders have publicly urged DOE to solidify this material before it leaves the Hanford region and our facility is what makes that possible. It is also work performed by local building trades through our relationship with the UA Local 598, which keeps skilled jobs and expertise in the Tri-Cities area. In addition to this critical announcement in early July, subsequent to the quarter end, Perma-Fix began receiving liquid effluent waste from the DFLAW facility at Hanford. I don't want to get too lost in the numbers. It's a culmination of years of permitting, capital investment and operational preparation. We built the capacity we obtained -- we built the capacity, we obtained the permits and we staffed the plant in anticipation of this waste and it's now starting to arrive. We have since begun receiving additional waste streams from DFLAW operations, including dry waste generated by the plant operations, which we're processing for disposal at the local Hanford site landfill. So this is not one system, or one waste stream. It is a growing number of waste streams from a plant that is still ramping up and DOE forecast -- throughput goals increase each month at the DFLAW operations, and they're working towards through production issues and associated equipment modifications to reach their objectives for 1 million gallons per year through vitrification at DFLAW. Now let me explain why the quarter looked the way it did. We received the Hanford-related waste streams we expected during the quarter. That part of the -- that part of our plan worked, and you can see that reflected in our backlog. Treatment-related backlog grew by 29% from $12.2 million at March 31 to $15.7 million at June 30. What did not happen on schedule was treatment. Our customer directed changes to the treatment protocol for these waste streams to accommodate a change in disposal facilities. This delayed processing from the second quarter into the third quarter. These changes supported the receipt of the waste for solidification, but did not support processing subsequent -- and subsequent revenue recognition. We already added the personnel and incurred the operating cost to handle these volumes, so the cost landed in our second quarter, while the associated revenue moved into the second half, and that mismatch is the primary driver of the Q2 loss. Two other items contributed. First, several new services projects started later than anticipated. Secondly, we processed our previously stored waste, lower-margin inventory waste, which compressed our treatment margin during that quarter as well. That work is now substantially complete and it frees up capacity ahead of our anticipated tank waste receipts. On the delayed waste streams, we expect to begin processing shortly and to be caught up by the end of the third quarter. So when I say we're encouraged about the second half, here is what is in front of us. The delayed waste we already hold -- we already have on site moves through treatment in the third quarter. DFLAW-related receipts continue to build through the balance of the year and task orders under the Master Subcontract become eligible in January of '27. Turning to Nuclear Services. This segment is providing a second engine of growth for us, and it's doing something else that really matters. It adds stability while the treatment volumes ramp. Services revenue grew 44% year-over-year in the quarter to $4.6 million from $3.2 million following the approximately $24 million Lawrence Livermore Master Task Agreement announced in the first quarter. We secured an additional awards during the second quarter at multiple DOE sites. along with several commercial and international contracts. Together, these support services backlog are over $17 million over the next 18 months. There's a second benefit that is easy to miss as well. Much of this work is waste retrieval and retrievable operations generate material that flows through our treatment plants. So services backlog is not just stability, it's also a feeder into our Treatment segment. Last week, we announced a strategic partnership with the Mirion Technologies under the Small Business Administration's Mentor-Protégé Program. The logic is straightforward. Cleanup missions across the DOE complex are getting larger and more technically demanding with much more difficult challenges. Our treatment infrastructure, remediation capabilities and project management combined with Mirion's radiation detection technologies and measurement and instrumentation expertise gives us a stronger position to compete for that work. It's a natural extension of where we've been heading and it widens the range of work we can offer. Before I turn things over, a brief word about PFAS. Our PFAS platform continues to advance with completed treatment work for both commercial and government customers and the installation of our Gen 2 unit to expand capacity. Our permanent destruction of PFAS remains one of the clearest unmet needs in this market, and our technology continues to maintain delivery of total destruction with no emissions and a significant value over incineration. While we realized a slowdown in PFAS receipts through May, sales and processing revenues have begun to increase through the summer with several awards from regional airports and commercial generators to support a solid backlog through Q3, including nearly $8 million in future award opportunities within our current pipeline of bids. Finally, a word on capital. In May, we completed a public offering with net proceeds of approximately $21 million, and a portion of that funding will be funding the DFLAW upgrades as well as our grouting upgrades at Perma-Fix Northwest. That capital is going directly into the capacity we've been discussing this afternoon. With that, I'll turn the call over to Ben to take you through the financials in detail. Ben?

Thank you, Mark, and good afternoon, everyone. For the second quarter of 2026, we reported revenue of $12.9 million compared with second quarter of '26 -- I'm sorry, compared with $14.6 million in the second quarter of '25. We reported a net loss of $6.2 million compared to a net loss of $2.7 million in the prior year. Both our basic and diluted loss per share was $0.32 compared to losses of $0.15 in the second quarter last year. Within our Treatment segment, revenue declined approximately $3.1 million from prior year. The decrease primarily reflected the lower processing volumes across the segment together with unfavorable waste mix, which resulted in higher treatment and other variable costs and lower gross profit. These operational factors, specifically a customer directed hold on processing as well as the focus on previously -- previous stored waste were the primary drivers of the year-over-year decline in treatment segment revenue and profitability. Despite these short-term challenges, waste receipts continued to improve. New waste receipts increased by $4.1 million over the first quarter, and our treatment backlog ended the quarter at $15.7 million compared to $13.1 million at the end of second quarter last year. We believe these are important leading indicators and reflect customer demand and provide improved visibility into future processing activity. Our Services segment generated revenue that was $1.4 million higher than prior year, driven by contributions from several new project awards. These gains were partially offset by the completion of certain projects that contributed revenue in the prior year. Gross profit in this segment also improved modestly year-over-year, reflecting the higher revenue, partially offset by increased labor and other indirect costs. Turning to our administrative expenses. SG&A decreased by approximately $379,000 compared with prior year's quarter, primarily reflecting lower marketing, E&P and credit losses, partially offsetting higher legal costs. Turning to the balance sheet and cash flow. We ended the quarter with $20.5 million in cash compared to $11.8 million at year-end 2025, reflecting the successful equity offering completed in May. Working capital also improved to $18.4 million, while treatment backlog increased, as mentioned earlier to $15.7 million, strengthening both our liquidity and our visibility into future revenue. Our continuing operations year-to-date operating activity used $8.8 million of cash, primarily reflecting the operating losses and normal working capital requirements as we continue to build backlog and execute projects. We invested $2.9 million in capital expenditures and other investing activities with approximately $2.7 million directed towards strategic capital projects that support future growth and operational capabilities. Finally, our financing activities provided $20.9 million of cash primarily from the May equity raise, which strengthened the balance sheet while allowing us to continue investing in key growth initiatives. We ended the quarter with a total debt of approximately $2.1 million, maintaining a conservative capital structure. Before I turn it over, let me address the going concern disclosure in our Form 10-Q, which we included to comply with accounting guidance and because the forecasts we use depend on waste shipments and on project activity directed by the U.S. government customers, which are not guaranteed. Nevertheless, we ended the quarter with $20.5 million in cash, approximately $2.1 million of total debt, and we expect existing liquidity, anticipated operating cash flows and borrowing availability to be sufficient to fund our operations over the next 12 months. In addition, subsequent to the end of the quarter, we amended our credit agreement with PNC Bank to extend the maturity of the facility from May 2027 to May 2030, further strengthening our long-term relationship with our lender. With that, I'll now turn the call over to the operator for questions.

[Operator Instructions] Our first question today is coming from Aaron Spychalla with Craig-Hallum.

First for us, can you talk about potential volumes for grouting as we look later this year, more so into 2027. The RFP kind of talked about some task orders starting in '27. And obviously, it sounds like there's some excess capacity on the East side to be able to handle some grouting. So just if you could elaborate on that, that would be great.

Sure. Thanks, Aaron. Let me see if we can get into some details here. Again, I think everyone understands that DOE hasn't formally awarded any task orders yet. But we're in an interesting situation. DOE has held several stakeholder meetings recently, including one with the State of Oregon back in June and one today with the Hanford Advisory Board in Richland. Both of those can be found on YouTube. And in this presentation, along with other presentations along the way, DOE has presented a graphic that is quite clear. This graphic defines their near-term plan to ship waste from the 200 East Area Tank program to -- directly to Perma-Fix Northwest by name. Again, this graphic is part of the dual glass-plus-grout strategy overall. So it's what has been written up in several press releases and op-eds and letters from the Assistant Secretary, Tim Walsh. And it includes on this graphic a depiction of AP-106 tank, which is the storage tank again, and shows that they'll be shipping waste for grouting from that tank to Perma-Fix Northwest. And then we'll also be shipping waste from the EMF facility to Perma-Fix Northwest, which they're obviously doing now. Along within that graph, it also has some anticipated volumes and coming out of the TSCR or coming from AP-106, which, again, as I said before, will be replenished by the TSCR, they're anticipating that they'll be able to ship 60,000 gallons per month beginning in 2026 and which we anticipate to be late in '26 and to maintain that 60,000 gallons a month for grouting through 2027. So roughly, was at 720,000 gallons in 2027, assuming they start right in the beginning of the month of January. That also is important to understand, it depends on how much of the AP-106 tank they use for the vitrification. If vitrification does get ramped up, that 100,000 gallon capacity that TSCR operates at, in other words, it pumps it into that tank at 100,000 gallons a month. If they don't use it for vitrification, those 60,000 gallons could go up. And then again, if DFLAW picks up operation it gets moving quicker, that number could go down. So we would anticipate, based on the graphic, about 60,000 gallons a month. Again, we don't have a task order, but because of the graphic and the way it's been presented to the public, we're confident that we'll be able to see a task order for that here in the next several months. In addition to that, as I said in the script, the AMPS is coming online in late '27 and is anticipated to be at full speed by 2028. That volume in '28, they're anticipating to be 300,000 gallons a month just from the amps itself. Again, a portion of that will go to the vitrification of DFLAW and a portion will come for grouting. Again, on the graphic, it specifically says that DOE anticipates 130,000 gallons a month coming from the AMPS system once it gets up and running in '28. So you can kind of get a sense of what DOE is looking at as far as potential volumes in the near term. And we're very excited about that. And we love them showing that graphic. Like I said, they showed it today at the Hanford Advisory Board meeting. Again, to be clear, it's in DOE's presentations in the public space, but we don't currently have a task order for it. Just to give a little bit more color on the West Side, the numbers are staggering. The West Side Removal System, which is called the WRMS, it's a different system. It's bigger overall, bigger infrastructure. That's designed to go at 3 million gallons a year. So the total capacity for that system plus the AMPS system and the TSCR system, DOE is saying should exceed 6 million gallons a year annually. But their goal is to push those, and they have a plan to do that. And DOE has been very vocal that their goal is to get to 9 million gallons a year to be grouted sometime after 2030. So the goals are very high. They have a plan for them. Obviously, there's regulatory considerations along the way. But this administration has been very, very bullish about this program and the importance of showing and demonstrating progress for the $3 billion a year that is -- makes up the Hanford budget and the fact that that's been a long time coming for this program to actually show progress. So we're really excited to be part of it. And this -- again, as I said in the script, the fact they didn't make an on-site award takes a lot of risk off the table for us. And -- there's no provision for any other regional new construction as defined by the WEIR document. So really, it's coming down to our cost versus our competitors and whether the DOE wants to transport liquids out of state for processing.

Great. And then saw some of the recent modifications, Class II, Class III. Can you kind of talk about how that might impact the glass-plus-grout strategy and any impact to those schedules?

Yes. This is all kind of new to us, too. I know the DOE has spent a lot of time working on getting the East Side accelerated and to meet the goals of the dual strategy. They had to make a couple of changes to their approach, which required some regulatory consideration in the form of permit mods. So there's two mods. One was a Class II mod, and one was a Class III mod. What we're surprised about is the DOE submitted those mods to the state regulators, I think it was August 5, just last week. The state turned this around in just a few days and got this after public comment for a 60-day public comment period, which is right now scheduled to end in, I think, October 6, if I remember correctly. And that's a very, very aggressive turn on behalf of the state regulators, which we would speculate underscores the fact that the state is working with DOE on this and is making it happen. And that -- if they meet that goal with the October 6 public comment period, barring not too many public comments that they should extend it, then DOE will be -- the state will be in a position to provide potentially permit modifications in -- by mid-October, late October, and DOE could be in a position to actually start shipping waste for grouting later in Q4. Again, this is speculation. There's maybe some other things we don't understand overall, but just a general process for this to me and our staff shows that this was a collaborative effort between the two organizations and that this program can get going as they're hoping for to be in full stride in early '27.

Great. Yes, I hope so. And one more question on -- in the RFP announcement, the DOE you mentioned the EMF waste stream to be included in that contract, too. Do you anticipate any impact to the EMF program that you're seeing? It sounds like that started to pick up here. And I know you don't guide kind of quarterly, but just it sounds like pretty constructive on improvements in the third quarter, maybe partially driven by that. If you could talk about that a little bit.

Sure. The EMF contract we have now was one that was put together pretty quickly and was not competitive. So they had to use an existing contract vehicle, which has the prime for this vehicle to be the disposal facility of EnergySolutions. So they're the prime and we do the grouting for EMF and we provide that to EnergySolutions and they dispose of it. What we're anticipating is that because of the modification in this H2C award and as defined in the press release from them, EMF will be a task order within the new contract. We do expect to receive that. Again, keeping in mind that this is covered -- we would anticipate this is covered in the ROD for DFLAW and that we would treat this waste under a new task order within the new contract and then we would ship it to the appropriate disposal facility once that task order is initiated after the first of the year. So again, we would expect that -- and also that's kind of reiterated or defined in the graphic I mentioned as well. So we have pretty high confidence that will continue moving. Now right now, people are probably wondering how much DFLAW waste we're getting. DFLAW has been chugging along at about 10,000 gallons a month on average, which is, as you know, their goal was about 100,000 gallons a month. So it's about 1/10 of the operation. So we're not getting significant quantities at this point. That is increasing. I was told that they did 35,000 gallons in July and are expecting to beat that significantly in August this month. At the 10,000 gallons a month level, we're getting about 200,000, 250,000 a month in EMF waste and a little less than that for our first shipment from the dry waste. So it's a pretty nominal amount at this point, but we do expect that to be ramping up. The facility is getting stronger. They're working through their issues. There was an announcement in the press today that the feed system has been replaced. They're working through the emission systems. So they're getting through the issues. And DOE is confident that they can still get ramped up to a higher percentage of operation capacity here in the next couple of quarters, and we'll likely see those quantities of waste significantly increase as they do get to a larger operating capacity.

Good. And then maybe one last one, if I could. Just on the permit expansion. You kind of talked about the timeline in mid-2027. Can you just talk about costs and investments there, investments in the labor force, just as we think about what that looks like and bringing that on?

Yes. We're very encouraged by the relationship with Department of Ecology. As you know, it took more than a decade to get our renewal, and it was -- it was a difficult process. They've done very well in the last couple of years here, and they're working with us in a very supportive manner. We started working with them in February for our permit mod to increase our total capacity to meet DOE's total capacity, as I mentioned, which is right now is about 9 million gallons a year. We've got the designs completed for the mixtures that we need to install. We also have poured concrete already, begun to purchase some of the heavy equipment so our folks can get trained on it. And we have started different components of the infrastructure upgrades as well to support the larger volumes. So we have begun making those improvements. The permit right now is expected to take about a year, maybe none months. So we do hope to be -- have that in place for the large volume increase by Q2 -- end of Q2 next summer or sometime in Q2 of '27. And I think we're on track for that, barring any unforeseen issues along the way. And they're working very well with us. So we don't see any reason why that wouldn't be a milestone that we can meet. So we have some ways to go. We didn't -- haven't pulled the trigger on the new mixers yet. We want to get this award first and get a feel for what the contract said. But we are anxious to get started with that. And we have a lot of confidence that DOE is going to start meeting the grouting objectives that they've defined that they put in these documents, and we want to make sure that we can handle all of it and hopefully be in a position to deliver without any constraint to DOE in regards to our processing.

Our next question is coming from Yuan Zhi with B. Riley.

I have a couple of them mainly on today's Master Subcontract. So first, can you please clarify what's your peak processing capacity? And how long does it take to ramp up to that level so that you can meet the H2C demand?

Sure. Right now, our capacity, including our permit and our equipment is 1.2 million gallons a year, about 100,000 gallons a month. And we are modifying our permit to increase that to over $10 million. And we expect that to take, as I mentioned, sometime into Q2 next year. And it may take a little bit longer than that to get everything deployed, but we're confident that we'll have that in place when DOE gets to their AMPS operating, as I mentioned, which can operate about 400,000 gallons a month with the TSCR. We'll be ready for that when it starts so that we're in a position to keep up with any waste that DOE might have.

Got it. And maybe a quick follow-up. In addition to the permit from Washington State, any other bottlenecks you see like equipment update or facility expansion will be needed for this ramp?

No -- it's a good question. No, we do see the primary critical path is the state. But again, we're modifying a quantity from, I guess as I said $1.2 million upwards to $10 million. And it's something -- it's a process we already do. We have a similar type of mixer, almost exact same technology that we're currently using now. So what we're asking for is pretty much increase the quantity and then you have to address the risk or operational considerations to make that increase. So we don't see that as a heavy lift and the state hasn't either so far. So we expect that to go through. But we see that as really the only hurdle we have between here and there is that, is getting that through the regulatory body. And we have -- our guys at our Northwest plant have met with the vendors associated with the mixing technology, spent some time with them. They've worked directly with them to run surrogate types of materials that look just like the waste we're going to be receiving and to ensure that the grouting product meets our standards. So they've spent some time making sure that will happen and done some analytical work along that route as well. Everyone is very comfortable. This is the same mixture that is used at the other DOE facilities. So it's a mixture that DOE is comfortable with and it's proven. So we're going to have a significant amount of redundancy with these additional mixtures and the mixtures we have now. So if one goes down, we can keep maintaining that. And that was a big component in the RFP that we responded to and this contract was awarded on is DOE wanted to make sure that each awardee would be able to handle that redundancy and have a plan to make sure that we don't hold them up as they're generating this waste for grouting. So we feel like we've done that in a big way.

Got it. And based on the maximum cumulative quantity of 50 million gallons and maximum cumulative value of $4.3 billion, is it reasonable to assume the average revenue per gallon is about $88?

That's a tough question. I can't answer that specifically. And the reason it's difficult to answer is because there's a lot of factors associated with this contract. For example, there's rates for just your basic 80% of the waste that they're anticipating being a certain type of waste with certain constituents that can be grouted very quickly and easily. There's provisions for certain waste streams that have high organics and metals in it that will have to be treated with additional enhancements in the treatment, which bear an additional surcharge, so to speak. There's also different types of waste that can come in with higher rate of activity, which we call Class B and C waste. Those are significantly higher cost.So you could probably say an average might be at that point, but I think it'd be wrong because it could all be the easy stuff. and you just get -- you hit the 50 million gallon limit before you got to the 4.3 million. On the other hand, if it's very complicated waste, it could be more than $80 a gallon, and you could reach the 4.3 million limit before you got to 50 million gallons. Because of the uncertainty associated with each tank, you just can't make that general statement like that. But it's a starting point for estimating the total volume and price.

Got it. And maybe one last question from us. On the long term, how should investors think about the revenue visibility and potential lumpiness as the Hanford volume scale versus your historical streams and patterns?

Yes. I mean I think this is by far, the most sustainable waste stream our company has ever seen as far as the long-term nature of it and the homogeneity of the waste itself. While I just mentioned a number of different variables, it is still liquid waste that can be transported in a specific container or a set of containers. And you can anticipate time and resources very well. So it is historical, we expect it to be much more sustainable and consistent than our historical lumpiness with waste. Now DOE has been very clear in the RFP process that it's going to be a lot of outages and the pumping and treating for grouted waste would only be, I think RFP specifically said about 50% production. In other words, they'll be up 50% with grouted waste and down as they move from tank to tank, which is why they want you to be able to store a lot of it and receive it at a very high rate and then be able to work through your inventory once you store it and start processing it. So I'm not sure if that answers your question, but we do see a pretty average annual revenue for this overall, particularly in consideration of the East Side where they have a very sophisticated infrastructure for all the tanks on the West Side, they move more from tank to tank to tank and could have a little lumpiness. But with the East Side and West Side together, I think it's going to smooth it out a lot to the point where we can make good forecast relative to what waste volumes we anticipate getting from on a year-to-year basis.

Got it. And congrats on winning this master contract.

I'm sorry, I didn't understand the question.