SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 4, 2004
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-11596 58-1954497
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1940 N.W. 67th Place, Suite A, Gainesville, Florida 32653
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (352) 373-4200
Not applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Section 2. Financial Information.
Item 2.05. Costs Associated with Exit or Disposal Activities. On October 4,
2004, the Board of Directors ("Board") of Perma-Fix Environmental
Services, Inc. (the "Company"), decided to discontinue operations of
the facility in Detroit, Michigan, owned by its subsidiary, Perma-Fix
of Michigan, Inc. The decision to discontinue operations at the
Detroit facility was principally as a result of two fires that
significantly disrupted operations at the facility in 2003.
Revenue for the Detroit facility was $5,739,000, or 6.8 percent, of
total consolidated revenues for the year ended December 31, 2003, and
$1,398,000, or 3.8 percent, of total consolidated revenues for the
six months ended June 30, 2004. The loss attributable to the Detroit
facility, for the six months ended June 30, 2004, was $1,017,000, and
approximately $524,000 for the year ended December 31, 2003.
The Company has estimated, based on current information available,
that in the third quarter of 2004 it will record a one-time charge of
approximately $11,275,000 as a result of the discontinued operations
of the Detroit facility. Estimated future cash outlays included in
the one-time charge are approximately $1,598,000 in one-time
severance and pension plan withdrawal liability, and $2,464,000 for
environmental closure and remediation of the facility. The charge
includes an estimated non-cash write down of its tangible assets of
approximately $4,723,000, and unamortized goodwill and other
intangibles allocated to the facility from its time of acquisition of
approximately $2,490,000. The Company is in the process of
calculating the amount of goodwill and other intangible assets
allocable to the discontinued operations, which could effect a change
in the actual amounts allocated to discontinued operations.
Additionally, the one-time charge could change as a result of
valuation of fixed assets, completion of an actuarial study of the
withdrawal liability under the pension plan at the Detroit facility,
completion of closure and remediation of the facility and recovery of
any settlements, if any, of the insurance claims discussed below. The
Company has also submitted insurance claims for the two fires at the
facility, and is currently negotiating settlements for those claims,
but at this time, the completion date and amount cannot be
determined.
As a result of the discontinued operations, pursuant to standards set
forth in FAS 142 "Goodwill and Other Intangible Assets", the Company
is required to test the remaining goodwill and other intangible
assets of its Industrial segment for potential impairment, and is
currently in the process of completing that test.
Item 2.06. Material Impairment. See Item 2.05 above for a discussion of material
impairments due to the Board's decision to discontinue operations of
the Detroit facility, owned by the Company's subsidiary, Perma-Fix of
Michigan, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Richard T. Kelecy
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Richard T. Kelecy
Dated: October 8, 2004 Chief Financial Officer