<TABLE>
<CAPTION>
Unaudited Pro Forma Condensed Combined
Statement of Operations
For the year ended December 31, 1999
Perma-Fix DSSI
(Amounts in Thousands) 12/31/99 12/31/99 Adjustments Pro Forma
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Revenues $ 46,464 $ 10,129 $ $ 56,593
Operating Expenses 44,894 7,301 1,294 (a)(c) 53,489
Management Fees 238 (238) (c) -
_________ ________ _______ ________
Income (Loss) before Taxes 1,570 2,590 (1,056) 3,104
Income Tax Provision - - -
_________ ________ _______ ________
Net Income (Loss) 1,570 2,590 (1,056) 3,104
Preferred Stock Dividends (308) - (308)
Gain on Preferred Stock Redemption 188 188
_________ ________ _______ _______
Net Income (Loss) Applicable to Common Stock $ 1,450 $ 2,590 $(1,056) $ 2,984
========= ======== ======== =======
Basic Net Income per Common Share $ 0.08 $ 0.17
========= =======
Diluted Net Income per Common Share $ 0.07 $ 0.14
========= =======
Weighted Average Number of Shares and
Potential Common Shares Used in Computing
Net Income per Share
Basic 17,488 17,488
======== =======
Diluted 21,224 21,224
======== =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unaudited Pro Forma Condensed Combined
Balance Sheet
June 30, 2000
Perma-Fix DSSI
(Amounts in Thousands) 6/30/00 6/30/00 Adjustments Pro Forma
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 391 $ 221 $ $ 612
Restricted Cash equivalents and Investments 20 - 20
Accounts Receivable, net 13,561 3,394 16,955
Inventories and Supplies 163 445 608
Prepaid Expenses 1,470 - 1,470
Assets of Discontinued Operations 48 - 48
_________ _________ _________ _________
Total Current Assets 15,653 4,060 - 19,713
Property and Equipment, net 23,705 1,865 4,523 (c) 30,093
Intangibles and Other Assets
Permits, net 8,298 - 4,190 (c) 12,488
Goodwill, net 6,997 - 6,997
Other Assets 624 - 6240
_________ _________ _________ _________
Total Other Assets 15,919 - 4,190 20,109
Total assets $ 55,277 $ 5,925 $ 8,713 $ 69,915
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 7,510 $ 177 $ $ 7,687
Accrued Payroll 156 156
Accrued Disposal and Transportation 1,175 1,175
Other Accrued Liabilities 6,407 675 (151)(a)(c) 6,931
Revolving Loan and Term Note Facility 938 - 938
Current Portion of Long-Term Debt 1,526 - 5,000 (a) 6,526
Current Liabilities of Discontinued Operations 315 - 315
_________ _________ _________ _________
Total Current Liabilities 16,696 2,183 4,849 23,728
Long-Term Liabilities
Environmental Accruals 3,764 - 3,764
Long Term Closure 972 1,150 2,956 (b) 5,078
Payable to Parent - 18,541 (18,541)(c) -
Long-Term Debt, less Current Portion 12,712 - 3,500 (a) 16,212
Long-Term Liabilities of Discontinued Operations 654 - 654
_________ _________ _________ _________
Total Long-Term Liabilities 18,102 19,691 (12,085) 25,708
_________ _________ _________ _________
Total Liabilities 34,798 21,874 (7,236) 49,436
Stockholders' Equity
Preferred Stock - - -
Common Stock 23 - 23
Additional Paid-in Capital 43,254 8,846 (8,789)(c) 43,311
Accumulated Deficit (20,936) (24,795) 24,738 (c) (20,993)
_________ _________ _________ _________
22,341 (15,949) 15,949 22,341
Less Common Stock in Treasury at cost (1,862) (1,862)
_________ _________ _________ _________
Total Stockholders' Equity 20,479 (15,949) 15,949 20,479
_________ _________ _________ _________
Total Liabilities and Stockholders' Equity $ 55,277 $ 5,925 $ 8,713 $ 69,915
========= ======== ========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unaudited Pro Forma Condensed Combined
Statement of Operations
For the six months ended June 30, 2000
Perma-Fix DSSI
(Amounts in Thousands) 6/30/00 6/30/00 Adjustments Pro Forma
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Revenues $ 28,081 $ 2,788 $ $ 30,869
Operating Expenses 28,206 2,873 655 (a)(c) 31,734
Management Fees 194 (194) (c) -
_________ ________ _______ ________
Income (Loss) before Taxes (125) (279) (461) (865)
Income Tax Provision - - -
_________ ________ _______ ________
Net Income (Loss) (125) (279) (461) (865)
Preferred Stock Dividends (104) - (104)
_________ ________ _______ _______
Net Income (Loss) Applicable to Common Stock $ (229) $ (279) $ (461) $ (969)
========= ======== ======== =======
Basic Net Income per Common Share $ (.01) $ (.05)
========= =======
Diluted Net Income per Common Share $ (.01) $ (.05)
========= =======
Weighted Average Number of Shares and
Potential Common Shares Used in Computing
Net Income per Share
Basic 21,279 21,279
======== =======
Diluted 21,279 21,279
======== =======
</TABLE>
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note I - Basis of Presentation
The unaudited pro forma balance sheet combines the historical consolidated
balance sheet of Perma-Fix Environmental Services, Inc. at June 30, 2000,
with the historical balance sheet of Diversified Scientific Services, Inc.
(DSSI), a wholly-owned subsidiary of Waste Management, Inc. at June 30, 2000.
The unaudited pro forma statements of income combine the historical
consolidated statements of operations of Perma-Fix Environmental Services,
Inc. for the quarter and six months ended June 30, 2000, with the historical
statements of income for DSSI for the quarter and six months ended June 30,
2000. Certain amounts reflected in the historical financial statement
presentations of both companies have been reclassified to conform to the
unaudited pro forma condensed combined presentation.
The unaudited pro forma financial statements exclude the effect of any
operating income improvements which may be achieved upon combining the
resources of the companies and exclude costs associated with the integration
and consolidation of the companies which are not presently estimable.
Note 2 - Pro Forma Adjustments
Perma-Fix Environmental Services, Inc. acquired DSSI on August 31, 2000, in a
transaction accounted for as a purchase. The pro forma adjustments consist
of the following:
(a) Debt was recorded in the amount of $8,500,000 (representing the
purchase price) pursuant to the merger agreement, including two short-term
interim financing notes totaling $5,000,000 and a five-year promissory note,
totaling $3,500,000.
(b) Long term closure reserve was increased to reflect the current
estimate of the potential future liability to close and remediate this
facility, determined pursuant to RCRA guidelines, should such a cessation
of operations ever occur.
(c) This transaction is accounted for as a purchase transaction and the
following adjustments were made:
* Excess of the purchase price over the net assets acquired of
$5,400,000 was assigned to the permits acquired and will be amortized over a
20 year life;
* All stockholders' equity accounts of DSSI were eliminated;
* Closing costs are estimated at approximately $275,000;
* DSSI property, plant and equipment was written up by
$4,531,000 to fair market value of $5,832,000; and
* All inter-company allocations were eliminated.
Note 3 - Federal Income Tax Consequences of the Merger
The unaudited pro forma financial statements assume that the merger
qualifies as a taxable transaction for federal income tax purposes. Any
potential taxable income has been offset against the net operating losses
(NOL) carry forward and therefore no provision has been made for income taxes.
