Centrus Energy (LEU) - 2024 Q1 - Quarterly Results

First Quarter 2024 Results Overview Centrus reported a net loss in Q1 2024 due to lower revenue, despite strong cash and HALEU production progress Financial and Operational Highlights Centrus reported a net loss of $6.1 million for Q1 2024, a significant downturn from a $7.2 million net income in Q1 2023, driven by a revenue decrease to $43.7 million primarily due to LEU customer delivery timing Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $43.7 million | $66.9 million | | Net Income (Loss) | ($6.1 million) | $7.2 million | | Net Income (Loss) per Share | ($0.38) | $0.49 (basic) / $0.47 (diluted) | - The consolidated cash balance stood at $209.3 million as of March 31, 2024[5] - Key operational achievements include the continued production of approximately 135 kilograms of High Assay Low-Enriched Uranium (HALEU) and signing approximately $900 million in contingent sales commitments for Low-Enriched Uranium (LEU)[3][5] Financial Performance Analysis Total revenue for Q1 2024 fell to $43.7 million from $66.9 million year-over-year, primarily due to a $35.2 million decline in the LEU segment, partially offset by a $12.0 million increase in Technical Solutions revenue Revenue by Segment | Revenue by Segment (in millions) | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | LEU Segment | $23.6 | $58.8 | -$35.2 | | Technical Solutions Segment | $20.1 | $8.1 | +$12.0 | | Total Revenue | $43.7 | $66.9 | -$23.2 | Cost of Sales by Segment | Cost of Sales by Segment (in millions) | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | LEU Segment | $23.1 | $34.9 | -$11.8 | | Technical Solutions Segment | $16.3 | $9.0 | +$7.3 | - Gross profit fell to $4.3 million in Q1 2024 from $23.0 million in Q1 2023, mainly due to a less favorable mix of LEU contracts, partially offset by improved gross profit in the Technical Solutions segment from the HALEU contract[9] Business and Strategic Updates Centrus continues HALEU production, secures significant LEU sales commitments, and prepares for the Russian uranium import ban HALEU Update Centrus has continued its HALEU enrichment operations, achieving cumulative deliveries of approximately 135 kilograms to the Department of Energy (DOE) and submitting bids for expanded production capacity - Cumulative deliveries of HALEU to the DOE have reached approximately 135 kilograms[10] - The company has submitted bids for two DOE RFPs for the deconversion and enrichment of HALEU to potentially expand production capabilities[10] Contingent Sales Commitments The company has secured approximately $900 million in contingent LEU sales commitments for deliveries scheduled between 2028 and 2040, conditional upon obtaining substantial public and private funding for new production capacity - Signed approximately $900 million in contingent LEU sales commitments for deliveries from 2028 to 2040[11] - These commitments are contingent upon securing significant public and private funding to build new production capacity, supported by a recent $2.72 billion federal allocation for domestic nuclear fuel production[11] Enriched Uranium Ban The U.S. Senate passed the 'Prohibiting Russian Uranium Imports Act,' which is expected to ban Russian uranium imports 90 days after enactment, though Centrus plans to apply for waivers through 2027 - The U.S. Senate passed H.R. 1042, the Prohibiting Russian Uranium Imports Act, which bans imports 90 days after enactment[12] - The legislation allows for waivers through 2027. Centrus will apply for waivers to continue supplying LEU to customers, though the outcome is uncertain[12] - The company believes it has sufficient liquidity to support business operations for at least the next 12 months, even with the potential ban[12] Financial Statements The financial statements detail Centrus's Q1 2024 net loss, cash flow improvements, and balance sheet changes Consolidated Statements of Operations and Comprehensive Income For the first quarter ended March 31, 2024, Centrus reported total revenue of $43.7 million and a net loss of $6.1 million, or ($0.38) per share, a decline from the prior year primarily due to lower revenue and gross profit from the separative work units segment Consolidated Statements of Operations and Comprehensive Income Summary | (in millions, except per share data) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenue | $43.7 | $66.9 | | Gross profit | $4.3 | $23.0 | | Operating income (loss) | ($10.6) | $8.3 | | Net income (loss) | ($6.1) | $7.2 | | Diluted net income (loss) per share | ($0.38) | $0.47 | Consolidated Statements of Cash Flows In Q1 2024, net cash provided by operating activities was $5.3 million, a significant improvement from a $9.7 million use of cash in Q1 2023, leading to an overall increase in cash, cash equivalents, and restricted cash Consolidated Cash Flow Activities | Cash Flow Activity (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Cash provided by (used in) operating activities | $5.3 | ($9.7) | | Cash used in investing activities | ($1.5) | ($0.3) | | Cash provided by financing activities | $4.4 | $18.9 | | Increase in cash, cash equivalents and restricted cash | $8.1 | $8.9 | Consolidated Balance Sheets As of March 31, 2024, Centrus held total assets of $750.0 million and total liabilities of $716.2 million, with total stockholders' equity of $33.8 million, reflecting a decrease in total assets primarily due to reduced inventories and accounts receivable Consolidated Balance Sheet Summary | (in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $209.3 | $201.2 | | Total current assets | $656.5 | $685.4 | | Total assets | $750.0 | $796.2 | | Total current liabilities | $455.2 | $471.1 | | Total liabilities | $716.2 | $763.9 | | Total stockholders' equity | $33.8 | $32.3 | Other Information Centrus provides an overview of its nuclear fuel business and outlines key forward-looking statements and associated risks About Centrus Energy Corp. Centrus Energy is a trusted supplier of nuclear fuel components and services to the nuclear power industry, focused on supply reliability and advancing centrifuge technologies to re-establish domestic uranium enrichment capabilities - Centrus supplies nuclear fuel components and services, having provided over 1,750 reactor years of fuel since 1998[13] - The company is focused on advancing centrifuge technologies to restore America's domestic uranium enrichment capability[13] Forward-Looking Statements and Risk Factors This section cautions that the report contains forward-looking statements subject to significant risks and uncertainties, including geopolitical risks, the potential impact of the U.S. ban on Russian uranium imports, and funding uncertainties for HALEU - The news release contains forward-looking statements that are not guarantees of future performance and involve known and unknown risks[15] - Key risks include the impact of the war in Ukraine and sanctions on the TENEX supply contract, legislation to ban Russian LEU imports, uncertainty of HALEU funding and demand, and competition from government-owned entities[16][17]