Centrus Energy (US:LEU)2023-11-08 22:03Financial Position - Total current assets as of September 30, 2023, are $531.9 million, a decrease from $587.1 million as of December 31, 2022[28] - Cash and cash equivalents increased to $183.3 million from $179.9 million[28] - Accounts receivable decreased significantly from $38.1 million to $9.4 million[28] - Total liabilities decreased to $668.7 million from $779.6 million[28] - Current liabilities decreased from $449.2 million to $337.3 million[28] - Long-term debt decreased to $89.6 million from $95.7 million[28] - Stockholders' deficit improved to $(24.0) million from $(74.1) million[28] - Deferred revenue and advances from customers remained stable at $272.7 million compared to $273.2 million[28] Revenue and Profitability - Total revenue for Q3 2023 was $51.3 million, a 54.1% increase from $33.2 million in Q3 2022[29] - Separative work units revenue reached $40.5 million, up from $7.7 million year-over-year, representing a 426.0% increase[29] - Gross profit for the nine months ended September 30, 2023, was $62.3 million, compared to $69.5 million for the same period in 2022, reflecting a decrease of 10.3%[29] - Operating loss for Q3 2023 was $(2.9) million, an improvement from $(12.8) million in Q3 2022[29] - Net income for the nine months ended September 30, 2023, was $28.1 million, down from $30.9 million in the same period of 2022[31] - Cash used in operating activities for the nine months ended September 30, 2023, was $(8.8) million, compared to $(35.1) million in 2022, indicating a significant improvement[31] - The company reported a basic net income per share of $0.53 for Q3 2023, compared to a loss of $(0.42) per share in Q3 2022[29] - Total cost of sales for the nine months ended September 30, 2023, was $154.3 million, an increase from $98.1 million in the same period of 2022[29] Operational Developments - Centrus began enrichment operations in Piketon, Ohio, on October 11, 2023, and made its first delivery of HALEU to the DOE on November 7, 2023[47] - The HALEU Operation Contract has a base contract value of approximately $150 million, with Phase 1 expected to produce 20 kilograms of HALEU UF by December 31, 2023[47] - The expected contract value for Phase 2 of the HALEU Operation Contract is approximately $90 million, subject to Congressional appropriations[48] - Centrus anticipates an annual production rate of 900 kilograms of HALEU UF under Phase 2 of the HALEU Operation Contract[48] - The Company received additional funding of $5.5 million for infrastructure and facility repairs under the HALEU Operation Contract on October 19, 2023[49] Customer and Contractual Relationships - The Order Book as of September 30, 2023, was approximately $1.0 billion, which includes about $306 million of Deferred Revenue and Advances from Customers[43] - Previously deferred sales and advances from customers recognized in revenue totaled $23.6 million for the nine months ended September 30, 2023[42] - Major customers in the LEU segment contributed $14.9 million, $12.5 million, and $8.7 million in revenue during Q3 2023, highlighting significant customer reliance[97] - The Company has entered into the Orano Supply Agreement for the long-term supply of SWU through 2030, allowing for flexible adjustments in purchase volumes[87] - The TENEX Supply Contract allows the company to reschedule certain quantities of SWU through 2028, with minimum purchase obligations each year[84] Risks and Uncertainties - The company faces risks related to geopolitical conflicts, particularly the war in Ukraine, which could impact operations and supply chains[19] - The company is dependent on government funding and demand for HALEU, with uncertainties regarding future contracts and operational capabilities[19] Legal and Regulatory Matters - The Company is involved in various legal proceedings, but it does not expect these matters to have a material adverse effect on its financial condition[94] - The Company continues to develop advanced enrichment technology under the 2002 DOE-USEC Agreement, which includes milestones for deploying a commercial American Centrifuge Plant[88] Pension and Employee Benefits - The net periodic benefit costs for defined benefit pension plans for the three months ended September 30, 2023, were $(1.0) million, compared to $(3.6) million for the same period in 2022, reflecting a decrease of 72.2%[65] - The defined benefit obligations for the pension plans were $527.3 million as of December 31, 2022, with $30.6 million related to a specific plan that triggered a remeasurement resulting in a net actuarial gain of $0.9 million for the three and nine months ended September 30, 2023[66] - On October 12, 2023, the company transferred approximately $186.5 million of its pension plan obligations to an insurer, funded by approximately $171.4 million in plan assets, with an estimated income of $15.1 million related to the pension settlement expected in Q4 2023[67] Stock and Financing Activities - The company sold 722,568 shares of Class A Common Stock for a total of $24.4 million in Q1 2023, with net proceeds of $23.4 million after expenses[73] - The company filed a shelf registration statement allowing it to offer and sell up to $200 million in securities, effective July 10, 2023, for general corporate purposes[75] - The Fifth Amendment to the Rights Agreement increased the purchase price for preferred stock from $18.00 to $160.38 and extended the expiration date to June 30, 2026[77] Shareholder Information - Basic net income for the three months ended September 30, 2023, was $8.2 million, resulting in a basic net income per share of $0.53, compared to a net loss of $(6.1) million and a loss per share of $(0.42) in the same period of 2022[72] - The average common shares outstanding for basic calculations increased to 15,374 thousand in Q3 2023 from 14,623 thousand in Q3 2022[72]