Centrus Energy (LEU) - 2025 Q1 - Quarterly Report

Risks and Challenges - The company faces significant risks related to geopolitical conflicts, particularly the war in Ukraine, which may impact its financial position and ability to conduct business [15]. - The company is dependent on TENEX for the delivery of LEU under the TENEX Supply Contract, with risks including potential sanctions and delivery prohibitions [15]. - The company may experience difficulties securing additional U.S. government waivers from the Import Ban Act, affecting its ability to import Russian LEU [15]. - The company is exposed to risks from increasing LEU imports from China, which could impact future sales and financing for enrichment capacity [17]. - The company faces risks related to operational factors, including potential delays in government task orders and funding for contracts [19]. - The company must navigate risks associated with financial market conditions that could affect liquidity and operational results [21]. - The company is subject to legal and compliance risks, including potential changes in government regulations and policies that could impact operations [25]. - The company may encounter challenges related to cybersecurity incidents that could disrupt business operations [19]. - The company is currently involved in multiple legal proceedings related to environmental claims, but does not expect these to have a material adverse effect on its financial condition [107]. - The company has provided notifications to the DOE to invoke indemnification under the Price-Anderson Act in relation to ongoing legal claims [104]. - The company believes its operations at the Portsmouth GDP site were fully compliant with NRC regulations, and any potential liabilities should be indemnified under the Price-Anderson Act [106]. Financial Performance - Total revenue for Q1 2025 was $73.1 million, a 67.3$43.7 million in Q1 2024 [27]. - Gross profit for Q1 2025 was $32.9 million, compared to$4.3 million in Q1 2024, reflecting a significant improvement [27]. - Net income for Q1 2025 was $27.2 million, compared to a net loss of$6.1 million in Q1 2024 [27]. - Cash provided by operating activities in Q1 2025 was $36.5 million, up from$5.3 million in Q1 2024 [29]. - Revenue for the three months ended March 31, 2025, was $51.3 million, a significant increase from$23.6 million in the same period of 2024, representing a growth of 117.4% [38]. - The LEU segment generated revenue of $51.3 million in Q1 2025, compared to$23.6 million in Q1 2024, indicating a growth of 117.4% [109]. - The Technical Solutions segment reported revenue of $21.8 million in Q1 2025, up from$20.1 million in Q1 2024, reflecting a growth of 8.5% [109]. - The gross profit for the Company in Q1 2025 was $32.9 million, compared to$4.3 million in Q1 2024, marking an increase of 664.0% [109]. - The LEU segment's gross profit was $31.2 million in Q1 2025, a substantial rise from$0.5 million in Q1 2024 [109]. - The Company reported a net income before income taxes of $35.2 million for Q1 2025, compared to a loss of$8.4 million in Q1 2024 [109]. Assets and Liabilities - Total current assets increased to $1,222.7 million as of March 31, 2025, from$1,015.2 million as of December 31, 2024 [26]. - Total assets reached $1,293.9 million as of March 31, 2025, compared to$1,093.4 million at the end of 2024 [26]. - Total liabilities increased to $1,080.0 million as of March 31, 2025, from$932.0 million as of December 31, 2024 [26]. - Stockholders' equity rose to $213.9 million as of March 31, 2025, up from$161.4 million at the end of 2024 [26]. - Cash and cash equivalents decreased to $653.0 million as of March 31, 2025, from$671.4 million as of December 31, 2024, a decline of 2.6% [53]. - Accounts receivable as of March 31, 2025, totaled $38.7 million, down from$80.0 million as of December 31, 2024, indicating a decrease of 51.6% [40]. - The Company's total remaining performance obligations were $0.7 billion as of March 31, 2025, down from$0.8 billion as of December 31, 2024 [50]. - Deferred revenue - current as of March 31, 2025, was $183.7 million, slightly up from$183.6 million as of December 31, 2024 [42]. - The Company recorded a $2.1 million increase in liabilities related to long-term inventory loans for the three months ended March 31, 2025 [60]. Stock and Financing - The Company issued common stock worth$25.2 million in Q1 2025, compared to $7.1 million in Q1 2024 [29]. - Average number of common shares outstanding increased to 16,982 thousand in Q1 2025 from 15,906 thousand in Q1 2024 [27]. - The Company sold 258,197 shares of Class A Common Stock for$26.1 million in the three months ended March 31, 2025, and 176,628 shares for $7.4 million in the same period of 2024 [85]. - The Company filed a shelf registration statement allowing it to offer and sell up to$200.0 million in securities, effective July 10, 2023 [84]. - The Company issued $402.5 million in 2.25$389.5 million, net of unamortized debt discounts and issuance costs [66]. - The Company had $74.3 million in 8.25$11.8 million [63]. - The carrying value of the 8.25% Notes is $0 due to redemption, while the carrying value of the 2.25$389.5 million, net of $13.0 million in unamortized debt issuance costs [76]. Contracts and Agreements - The HALEU Operation Contract has a modified Phase 2 contract value of approximately$152.3 million, with a target fee estimated at $7.7 million [47]. - The Company recorded aggregate cash payments of$145.8 million under the HALEU Operation Contract through March 31, 2025 [48]. - The HALEU Demonstration Contract has been funded by the DOE up to $173.0 million, with cash payments received totaling$171.2 million through March 31, 2025 [45]. - The Technical Solutions segment's remaining performance obligations were approximately $23.4 million as of March 31, 2025, down from$28.0 million as of December 31, 2024 [52]. - The TENEX Supply Contract allows the Company to purchase SWU with commitments that could extend to 2028, subject to market-related pricing adjustments [95][96]. - The Orano Supply Agreement for SWU runs through 2030, providing flexibility to adjust purchase volumes with pricing determined by a market-related formula [99]. - The Company has entered into a Sixth Amendment to the Section 382 Rights Agreement, extending the Final Expiration Date to June 30, 2026 [90]. Employee and Operational Factors - The company’s ability to attract and retain qualified personnel is critical for potential operational expansion [21].