BETHESDA, Md. - Centrus Energy Corp. (NYSE American: LEU) ('Centrus' or the 'Company')today reported first quarter 2024 results.
The Company reported a net loss of $6.1 million for thethree months ended March 31, 2024, which is $0.38 (basic and diluted) per common share.'Centrus had a strong start to the year, making additional HALEU deliveries to the Department ofEnergy ('Department' or 'DOE') and submitting bids on two Requests for Proposals from theDepartment aimed at expanding its HALEU production capacity. In addition, the Company signedapproximately $900 million in contingent LEU sales commitments to support the potentialconstruction of LEU production capacity alongside our HALEU production,' said Centrus Presidentand CEO, Amir Vexler. 'Recent funding legislation enacted with wide, bipartisan support includes a$2.7 billion federal investment in domestic enrichment. With the support of a strong, public-private partnership, we look forward to scaling up production to meet the full range of commercial andnational security requirements for enriched uranium, including HALEU for advanced reactors andLEU for the existing reactor fleet. While our first quarter results reflect the expected quarter-to-quarter fluctuations in our revenues and margins - largely resulting from the timing of customerdeliveries - we are encouraged by the progress we are making to reclaim American leadership inuranium enrichment.'
Financial Results
Centrus generated total revenue of $43.7 million and $66.9 million for the three months endedMarch 31, 2024 and 2023, respectively, a decrease of $23.2 million.Revenue from the LEU segment was $23.6 million and $58.8 million for the three months endedMarch 31, 2024 and 2023, respectively, a decrease of $35.2 million. SWU revenue decreased by$35.2 million as a result of a decrease in the volume of SWU sold and a decrease in the average price of SWU sold.
Revenue from the Technical Solutions segment was $20.1 million and $8.1 million for the threemonths ended March 31, 2024 and 2023, respectively, an increase of $12.0 million. Revenuegenerated by the HALEU Operation Contract increased $12.0 million due to the transition fromPhase 1 to Phase 2 in late 2023.Cost of sales for the LEU segment was $23.1 million and $34.9 million for the three months endedMarch 31, 2024 and 2023, respectively, a decrease of $11.8 million. SWU costs decreased by $12.3million as a result of a decrease in the volume of SWU sold, partially offset by an increase in theaverage unit cost of SWU sold. Cost of sales for the three months ended March 31, 2024 and 2023included $0.3 million and $2.1 million, respectively, for the revaluation of inventory loans.
Cost of sales for the Technical Solutions segment was $16.3 million and $9.0 million for the threemonths ended March 31, 2024 and 2023, respectively, an increase of $7.3 million. Costs incurred forthe HALEU Operation Contract increased by $7.3 million due to the transition from Phase 1 toPhase 2 in late 2023.
Gross profit for the Company was $4.3 million and $23.0 million for the three months ended March31, 2024 and 2023, respectively. The decrease for the three months ended March 31, 2024 was primarily attributed to the decrease in gross profit in the LEU segment, as previously discussed. LEUcustomers generally have multi-year contracts that carry annual purchase commitments, notquarterly commitments. The gross profit in our LEU business varies based upon the timing of thosecontracts. The pricing of those deliveries varies depending upon the market conditions at the time thecontract was signed with a portion of our outstanding contracts entered into at historically higher prices. The Company's gross profit was lower primarily due to the composition of contracts in the prior year, which included legacy and higher priced contracts. This was partially offset by anincrease in gross profit in the Technical Solutions segment, primarily related to the transition fromPhase 1 to Phase 2 of the HALEU Operation Contract.
HALEU Update
On October 11, 2023, the Company announced the beginning of enrichment operations, and on November 7, 2023, it announced its first delivery of 20 kilograms of HALEU uranium hexafluoride(UF6), completing Phase 1 of the HALEU Operation Contract under budget and ahead of schedule.The DOE is contractually required to provide storage cylinders necessary to collect the output of thecascade. Using the storage cylinders currently made available by the DOE, Centrus has nowachieved cumulative deliveries to the DOE of approximately 135 kilograms of HALEU UF
On November 28, 2023 and January 9, 2024, the DOE issued two RFPs for the deconversion andenrichment of HALEU, respectively. The Company submitted bids for both RFPs, with the goal ofexpanding HALEU production capability at the Piketon, Ohio facility
Contingent Sales Commitments
Centrus also announced that it has signed approximately $900 million in contingent LEU salescommitments, subject to entering into definitive agreements, in support of potential construction ofLEU production capacity at Centrus' American Centrifuge Plant in Piketon, Ohio. Thesecommitments, reflecting deliveries of LEU to customers from 2028 to 2040, are contingent uponCentrus securing substantial public and private funding and financing to build the new capacity.Centrus competes against large, government-owned entities and is the sole publicly tradedenrichment company in the industry. Congress recently included $2.72 billion for new, domesticnuclear fuel production as part of a government funding bill signed into law on March 9, 2024.
Enriched Uranium Ban
On April 30, 2024, the Senate passed the
Prohibiting Russian Uranium Imports Act
(H.R. 1042),which bans uranium imports from Russia and becomes effective 90 days after enactment. Thelegislation, which was previously passed by the U.S. House of Representatives, has been presentedto the President of the United States for signature into law. The legislation includes a provision thatallows for the granting of waivers through 2027, including if the waiver serves the national interest.When the legislation is enacted, we will apply for waivers from the Secretary of Energy and otherapplicable government agencies to request permission to continue supplying LEU to our customers.It is uncertain whether any waiver would be granted and, if granted, whether any waiver would begranted in a timely manner. The Company anticipates having adequate liquidity to support its business operations for at least the next 12 months.
About Centrus Energy Corp.
Centrus Energy is a trusted supplier of nuclear fuel components and services for the nuclear powerindustry. Centrus provides value to its utility customers through the reliability and diversity of itssupply sources - helping them meet the growing need for clean, affordable, carbon-free electricity.Since 1998, the Company has provided its utility customers with more than 1,750 reactor years offuel, which is equivalent to 7 billion tons of coal. With world-class technical and engineeringcapabilities, Centrus is also advancing the next generation of centrifuge technologies so that Americacan restore its domestic uranium enrichment capability in the future. Find out more atcentrusenergy.com.
Forward-Looking Statements: This news release contains 'forward-looking statements' within the meaning of Section 21E of the Securities ExchangeAct of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-lookingstatements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as 'expects', 'anticipates', 'intends', 'plans', 'believes', 'will', 'should','could', 'would' or 'may' and other words of similar meaning. These forward-looking statements are based oninformation available to us as of the date of this news release and represent management's current views and assumptionswith respect to future events and operational, economic and financial performance. Forward-looking statements are notguarantees of future performance, events or results and involve known and unknown risks, uncertainties and otherfactors, which may be beyond our control.
Contact:
Tel: (301) 564-3200
Fax: (240) 630-7808
CENTRUS ENERGY CORP. 
