• Revenue: $57.7 million in the third quarter of 2024, an increase of $6.4 million compared to the same quarter in the prior year.
• Gross Profit: $8.9 million, a slight decrease from $11.3 million in the prior year.
• Net Loss: $5 million compared to net income of $8.2 million in the prior year.
• LEU Segment Revenue: $34.8 million, a decrease of $5.7 million compared to the same quarter in 2023.
• LEU Gross Profit: $5.2 million compared to $10.1 million in the third quarter of 2023.
• Technical Solutions Revenue: $22.9 million, an increase of $12.1 million compared to the third quarter of 2023.
• Technical Solutions Gross Profit: $3.7 million, an improvement of $2.5 million versus the third quarter of 2023.
• Total Backlog: $3.8 billion as of September 30, 2024, extending to 2040.
• LEU Segment Backlog: Approximately $2.8 billion as of September 30, 2024.
• Technical Solutions Backlog: Approximately $0.9 billion as of September 30, 2024.
• Cash and Restricted Cash: $226.9 million, with $194.3 million in cash and $32.6 million in restricted cash.
• Pension Plan Obligations: Reduced by $21 million in the third quarter of 2024, with $29 million remaining as of September 30, 2024.

• Warning! GuruFocus has detected 9 Warning Signs with LEU.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Centrus Energy Corp (LEU) achieved $57.7 million in revenue for the third quarter of 2024, an increase of $6.4 million compared to the same quarter in the prior year.
• The company secured a $2.7 billion HALEU production award from the Department of Energy, covering a 10-year period.
• Centrus Energy Corp (LEU) has a total backlog of $3.8 billion extending to 2040, with $2.8 billion in the LEU segment.
• The company has secured approximately $2 billion in customer commitments to support new LEU production capacity.
• Centrus Energy Corp (LEU) maintains a strong cash position with $226.9 million in cash and restricted cash, facilitating strategic investments.

Negative Points

• Centrus Energy Corp (LEU) reported a net loss of $5 million for the third quarter of 2024, compared to a net income of $8.2 million in the prior year.
• The LEU business segment experienced a decrease in revenue by $5.7 million compared to the same quarter in 2023.
• Gross profit decreased to $8.9 million from $11.3 million in the prior year.
• The company faces uncertainty regarding the timing and amount of future task orders from the Department of Energy.
• Margins for the LEU segment have been lower year-to-date compared to the previous year, reflecting the roll-off of higher-margin contracts.

Q & A Highlights

Q: Can you provide more details on the next steps and timing for the HALEU selection and contracts? A: Unfortunately, the timing is at the discretion of the Department of Energy. We are currently selected for IDIQ awards totaling up to $2 million, and we await specific task orders. The timing and amount allocated to these task orders are unknown, but we hope it will be sooner rather than later. (Amir Vexler, CEO)

Q: How does the increasing demand for nuclear power affect Centrus Energy's market position, particularly with HALEU? A: The growing demand strengthens our business case and value proposition. Regardless of whether new reactors or restarted reactors require LEU or HALEU, the limited number of enrichers, including Centrus, positions us uniquely in the market. This demand, especially from large tech companies, supports investment throughout the supply chain. (Amir Vexler, CEO)

Q: Regarding the new contingent LEU sales commitments, can you share any details about the customers or their locations? A: We announced an agreement with KHNP, a major nuclear utility. Most agreements are under non-disclosure, but they involve utilities operating reactors that require LEU. These commitments are for existing markets and can be satisfied with our licensed LEU capability. (Amir Vexler, CEO)

Q: Are the newly awarded contracts likely to be fixed or cost-share structures, similar to the current HALEU contract? A: The IDIQ instrument allows flexibility for the Department of Energy to award contracts in various types, including fixed price or cost reimbursable. We believe these types are most applicable for the build-out, but the final decision rests with the Department of Energy. (Kevin Harrill, CFO)

Q: Will building out LEU production alongside HALEU at Piketon affect the timeline for HALEU production? A: This depends on the timing and alignment of funding and contracts. We will need to review and provide a thoughtful response regarding any changes to the projected timeline of 42 months. (Amir Vexler, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.