Greetings, and welcome to the Perma-Fix Environmental Third Quarter 2018 and Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, David Waldman, Investor Relations for Perma-Fix. Thank you, you may begin.

Thank you. Good morning, everyone, and welcome to Perma-Fix Environmental Services Third Quarter Conference Call. On the call with us this morning are Mark Duff, President and CEO; Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing third quarter 2018 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 Investor Relations at (212) 671-1021. 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 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. These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission as well as this morning'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. I'm pleased to report that for the third straight quarter this year, we achieved revenue growth and profitability, despite continued an unexpected delays directly related to the closure of our M&EC facility. We now expect this facility to be closed on or before the end of the year, resulting in a positive impact on performance of the overall company. Despite this temporary disruption associated with the closure of M&EC as we shipped resources among our facilities, revenue for the third quarter of 2018 increased to $12 million versus $11.8 million for the same period last year. It's important to note, we have maintained the revenue over the last year despite terminating operations at M&EC, along with the termination of the treatment capabilities that were unique to that facility. Those capabilities have not yet been fully deployed within our other existing plants. M&EC generated about $5.6 million revenue in the first nine months of 2017 compared to $155,000 in '18. In other words, our three plants -- our three existing plants covered the drop in revenue. Our gross profit included $1.1 million and $550,000 of closure cost related to M&EC facility for the third quarter of 2018 and '17, respectively. Including these expenses -- excuse me, excluding these expenses, gross profit would have increased to $2.9 million versus $2.3 million for the third quarter of '17. We achieved adjusted EBITDA of $510,000 compared to $654,000 for the same period in '17, and we generated net income attributed to shareholders of $221,000 or $0.02 per share versus a loss of $2 million or a loss of $0.17 per share for the same period last year. The transition issues related to our M&EC facility are largely behind us with closure activities expected to be ramping down and regulatory approvals…

Thank you, Mark. Starting with our revenue. Our total revenue from continuing operations for the third quarter was relatively flat at $12 million compared to $11.8 million in the third quarter of prior year. Our Service segment revenue increased by $478,000 or 19.9%, which was offset by a reduction in our Treatment segment of $252,000 or 2.7%. Our Service segment produced higher project-based revenue due to the increased scope in our current projects. Our Treatment segment did see an increase in revenue, as Mark mentioned, at our three other operating plants but this increase was offset by a drop in revenue at M&EC year-over-year, which recognized $578,000 of revenue in 2017 and only $23,000 in 2018. For nine months ending September 30, our total revenue was $37.8 million compared to $37.2 million in the prior year. As with the quarter, our Services revenue exceeded prior year, while our Treatment segment was lower than prior year, due to the reduction in revenue at M&EC from the closure. Similar to our revenue, our cost of sales were relatively flat at $10.2 million compared to prior year cost of $10 million. In this quarter, we booked an additional $1.1 million of reserve related to the M&EC closure and that compares to $550,000 in the third quarter of 2017. Our gross profit for the quarter increased slightly by -- to $1.8 million compared to $1.7 million in Q3 of 2017 and the impact of the $1.1 million reserve for the M&EC closure negatively impacted this gross profit. Excluding this reserve in Q3 of this year and the reserve we booked last year, gross profit would have been increased by approximately $623,000. Year-to-date our gross profit was $7.2 million compared to $6.8 million last year. Again, this gross profit includes increased closure reserves at M&EC…

[Operator Instructions] Our first question here is from Bill Nasgovitz from Heartland Funds.

You mentioned transformational contracts. Can you elaborate a little bit in terms of what -- is it Treatment, Services, both and just perhaps give us some color on that?

Sure, Bill. Basically, what we mean by transformational contracts are ones that are significant enough that would dramatically change the company and those, as we've talked about in the past, are a little bit farther out, some of those would include the large DOE contracts that are in the process -- in the procurement process where we'd be on teams -- we'd be a junior member on teams with the larger companies and those would be transformative. The test-bed initiative will be transformative and once we get some of these -- all of our -- or I'd say all of our transition over with M&EC, and our new construction complete, that would be transformative as well. So basically, Bill, definition of transformative is an impact to the company that would potentially be significant.

I might have missed this, so M&EC that facility is finally closed this quarter? Fourth quarter?

It's not finally closed. We're about 95% done, cleaning it out. Bill, particularly we have to remove contamination from the floors, and we've had a lot of problems, and we keep finding more and more. We know where all of it is now, we've got some new technology deployed this week in there too, this is what we call scabbling. That's basically taking about 0.5 inch off the concrete floors and the -- then once we've done that then we'll do a final survey and verify that it's clean and the regulators will approve that, and we'll be out. So we're hoping to have all that done by the end of the third -- excuse me, end of the fourth quarter, this quarter.

There are no further questions. I'd like to turn the floor back over to management for any closing comments.

All right, thank you. I'd like to thank everyone for participating in the third quarter conference call. As I mentioned earlier, we achieved solid growth and profitability. Our backlog is up. We've increased bidding activities in our Services segment, and we're working on several large projects within the Treatment segment that can be transformative, as we discussed. And we look forward to updating you again next quarter. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.