PERMA FIX ENVIRONMENTAL SERVICES INC Segments Disclosure

NOTE 16

SEGMENT REPORTING

 

In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity:

 

	●	from which we may earn revenue and incur expenses;
	●	whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and
	●	for which discrete financial information is available.

 

The Company has two reporting segments, consisting of the Treatment and Services Segments, which are primarily based on a service offering approach (see “Note 1- Description of Business and Basis of Presentation” for the type of services from which each of the Company’s reportable segments derives its revenue). The Company’s reporting segments exclude our corporate headquarters which serve to support its two reporting segments through various functions, such as our executives, finance, treasury, human resources, accounting, and legal departments. Financial results for our corporate headquarters are not considered by the CODM in evaluating the performance of the reportable segments. Our reporting segments also exclude our discontinued operations (see “Note 8 – Discontinued Operations”) which do not generate revenues.

 

The Company’s CODM is represented by its Chief Executive Officer (“CEO”) and COO (or “CODM group”). The CODM group evaluates the performance of the Treatment and Services segments and allocates resources (including financial or capital resources) to each reporting segment based on revenue and income (loss) from operations by comparing actual results for these metrics to budgeted and forecasted amounts for these metrics on a monthly, quarterly and year-to-date basis. The Company’s CODM group does not evaluate and allocate resources for the reportable segments using assets; therefore, the Company does not disclose assets for its reporting segments.

 

The table below summarizes loss from operations for the Company’s two reporting segments and its corporate headquarters and provides reconciliation of such financial metric to the Company’s consolidated totals for the years 2025 and 2024 for our continuing operations. Significant segment expenses that are included in the measure of segment profit or losses for each reportable segment and regularly provided to the CODM include payroll and benefit, material and supplies, disposal and transportation and subcontract expenses and are reflected separately, where applicable (in thousands).

 

 SCHEDULE OF SEGMENT REPORTING INFORMATION

Segment Reporting as of and for the year ended December 31, 2025

 

		Treatment				Services				Segments Total				Corporate (1)				Consolidated Total
Revenue from external customers		$	45,097			$	16,577			$	61,674	(4)(5)		$	—			$	61,674
Cost of goods sold:
Payroll and benefit expenses			18,810				8,516				27,326				—				27,326
Material and supplies expenses			6,965				—				6,965				—				6,965
Disposal expenses			3,195				—				3,195				—				3,195
Transportation expenses			1,488				—				1,488				—				1,488
Subcontract expenses			—				1,256				1,256				—				1,256
Other cost of goods sold (2)			9,845				5,626				15,471				—				15,471
Total cost of goods sold			40,303				15,398				55,701				—				55,701
Gross profit			4,794				1,179				5,973				—				5,973
Selling, general and administrative expenses (“SG&A”):
Payroll and benefits			3,571				2,355				5,926				3,854				9,780
Other SG&A (3)			1,697				861				2,558				4,078				6,636
Total SG&A			5,268				3,216				8,484				7,932				16,416
Research and development			969				30				999				292				1,291
Loss (gain) on disposal of property and equipment			6				(5	)			1				—				1
Loss from operations		$	(1,449	)		$	(2,062	)		$	(3,511	)		$	(8,224	)			(11,735	)
Interest income																			1,123
Interest expense																			(230	)
Interest expense-financing fees																			(84	)
Other expense																			261
Loss from continuing operations before taxes																			(10,665	)
Income tax expense																			—
Loss from continuing operations, net of taxes																		$	(10,665	)

 

Segment Reporting as of and for the year ended December 31, 2024

 

		Treatment				Services				Segments Total				Corporate (1)				Consolidated Total
Revenue from external customers		$	34,953			$	24,164				$ 59,117	(4)(5)		$	—			$	59,117
Cost of Goods Sold:
Payroll and benefits expenses			16,257				9,494				25,751				—				25,751
Material and supplies expenses			4,074				—				4,074				—				4,074
Disposal expenses			5,317				—				5,317				—				5,317
Transportation expenses			1,118				—				1,118				—				1,118
Subcontract expenses			—				7,152				7,152				—				7,152
Other cost of goods sold (2)			9,297				6,406				15,703				—				15,703
Total cost of goods sold			36,063				23,052				59,115				—				59,115
Gross (loss) profit			(1,110	)			1,112				2				—				2
SG&A:
Payroll and benefits			2,858				2,413				5,271				3,296				8,567
Other SG&A (3)			1,432				892				2,324				3,600				5,924
Total SG&A			4,290				3,305				7,595				6,896				14,491
Research and development			842				111				953				219				1,172
Loss on disposal of property and equipment			18				3				21				—				21
Loss from operations		$	(6,260	)		$	(2,307	)		$	(8,567	)		$	(7,115	)			(15,682	)
Interest income																			921
Interest expense																			(473	)
Interest expense-financing fees																			(66	)
Other income																			166
Loss from continuing operations before taxes																			(15,134	)
Income tax expense																			4,435
Loss from continuing operations, net of taxes																		$	(19,569	)

 

(1)	Amounts reflect the activity for corporate headquarters not included in the segment reporting information.

 

(2)	Other cost of goods sold for each reportable segment includes:
	Treatment - lab, regulatory, maintenance, depreciation and amortization, travel, outside services and general expenses.
	Services - material and supplies, disposal and transportation, lab, regulatory, maintenance, depreciation and amortization, travel, outside services and general expenses.

 

 

(3)	Other SG&A for each reportable segment and Corporate includes:
	Treatment-depreciation and amortization, travel, outside services, maintenance and general expenses.
	Services- travel, outside services, maintenance and general expenses.
	Corporate-maintenance, depreciation and amortization, travel, outside services/public company and general expenses.

 

(4)	Revenue derived from federal government entities, either directly as a prime contractor or indirectly for others as a subcontractor to federal government entities, was approximately $39,243,000 or 63.6% of total revenue for 2025 and $40,550,000 or 68.6% of total revenue for 2024.

 

(5)

The following table reflects revenue based on customer location (in thousands):

 

 SCHEDULE OF REVENUE BASED ON CUSTOMER LOCATION

		2025				2024
United States		$	55,234			$	56,665
Canada			2,820				513
Germany			774				734
Italy			389				77
Mexico			2,144				394
Slovenia			94				181
United Kingdom			219				553
Total		$	61,674			$	59,117

 

The following table presents depreciation and amortization for the years ended December 31, (in thousands):

 SCHEDULE OF DEPRECIATION AND AMORTIZATION

		2025				2024
Treatment		$	1,582			$	1,484
Services			133				177
Total segment			1,715				1,661
Corporate			44				102
Total		$	1,759			$	1,763
Depreciation and amortization		$	1,759			$	1,763

 

The following table presents capital expenditures for the years ended December 31, (net of financed amount of $464,000 and $406,000 for 2025 and 2024, respectively (in thousands):

 SCHEDULE OF CAPITAL EXPENDITURES

		2025				2024
Treatment		$	4,623			$	3,002
Services			85				403
Total segment			4,708				3,405
Corporate			—				—
Total		$	4,708			$	3,405
Capital expenditures		$	4,708			$	3,405

 

The following table presents long-lived assets for the Company’s continuing operations for the years ended December 31, (in thousands):

 SCHEDULE OF LONG-LIVED ASSETS FOR CONTINUED OPERATIONS

		2025				2024
United States		$	24,600			$	21,133
Foreign Subsidiaries			—				—
Total		$	24,600			$	21,133