• Annual Revenue: $442 million for 2024.
• Gross Profit: $111.5 million for 2024.
• Operating Income: $48 million for 2024.
• Net Income: $73.2 million for 2024.
• LEU Segment Revenue: $349.9 million, an increase of $80.9 million compared to 2023.
• Technical Solutions Revenue: $92.1 million, an increase of $40.9 million compared to 2023.
• Cost of Sales (LEU): Increased from $163.9 million in 2023 to $256 million in 2024.
• Company Backlog: $3.7 billion extending to 2040.
• Convertible Senior Notes Issued: $402.5 million with net proceeds of $388.7 million.
• Unrestricted Cash Balance: $671.4 million at year-end.
• Pension Plan Obligations: Reduced by approximately $280 million, with $26 million remaining.

• Warning! GuruFocus has detected 4 Warning Signs with LEU.

Release Date: February 07, 2025

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

Positive Points

• Centrus Energy Corp (LEU) reported a significant year-over-year revenue increase of nearly 40%, reaching $442 million in 2024.
• The company secured three major contract awards from the Department of Energy (DOE) to boost American production of low enriched uranium (LEU) and high assay low enriched uranium (HALEU).
• Centrus Energy Corp (LEU) strengthened its balance sheet by issuing $402.5 million in convertible senior notes, enhancing its capital position.
• The company has a substantial backlog of $3.7 billion extending to 2040, indicating strong future revenue potential.
• Centrus Energy Corp (LEU) received approval for $62.4 million in investment tax credits, supporting its manufacturing facility expansion in Oak Ridge, Tennessee.

Negative Points

• The Russian government revoked the general license for TENEX, Centrus Energy Corp's (LEU) supplier, complicating the export of enriched uranium to the United States.
• Despite revenue growth, the company's net income decreased from $84.4 million in 2023 to $73.2 million in 2024.
• Centrus Energy Corp (LEU) faces uncertainty regarding the timing of DOE task orders, which are crucial for future contract execution.
• The company experienced an increase in cost of sales for LEU, rising from $163.9 million in 2023 to $256 million in 2024, impacting profit margins.
• Centrus Energy Corp (LEU) is dependent on securing substantial public and private investment to fulfill its contingent LEU sales commitments.

Q & A Highlights

Q: Could you provide more details on the next steps for the DOE contracts and the timing for task orders? A: (Amir Vexler, CEO) We cannot speculate on the timing of the task orders. However, we are encouraged by the forward movement as awards have been given. The next steps involve the DOE issuing specific task orders, but we have no insight into the timing of these orders.

Q: Can you elaborate on the $60 million investment and its impact on readiness for task orders? A: (Amir Vexler, CEO) The investment is aimed at ensuring we are prepared to act quickly when task orders are issued. It is a readiness investment to allow us to hit the ground running. (Kevin Harrill, CFO) This investment helps us stand up our supply chain for wide-scale distribution and production, reinforcing our first-mover advantage.

Q: Regarding the TENEX licenses, can you provide an order of magnitude for the number of licenses received? A: (Kevin Harrill, CFO) We cannot disclose specific numbers. The Russian decree requires TENEX to obtain specific licenses for each shipment to the U.S. We have seen positive traction with the first three shipments, but future outcomes are uncertain.

Q: The fourth quarter saw high uranium sales. Was this due to inventory sales or market opportunities? A: (Kevin Harrill, CFO) The high sales were due to taking advantage of market opportunities, with UF6 prices at historic levels. We matched up with a counterparty for a key spot sale in December, which contributed to our annual results.

Q: Does the $60 million investment officially start the 42-month timeline for the first commercial cascade? A: (Kevin Harrill, CFO) Yes, that investment kick-starts the 42-month timeline. However, the timeline is contingent on receiving government task orders within the next 6 to 12 months to continue the process.

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