LEU - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to Centrus Energy's First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Dan Leistikow, Vice President, Corporate Communications. Thank you.

You may begin.

Dan Leistikow

morning. Good joining for us. you Thank call the quarter for first cover XXXX Today's ended results of March the will XX.

Financial Officer Here today Controller Strawbridge, Chief Philip Chief and Executive Chief are Dan Poneman, Senior President Chief Accounting Vice John Treasurer; and and and Officer. Officer; Officer, Dorrian, Administrative President,

yesterday. like news conference well turning listening as Before I'd to call release call of all our to over welcome the This follows those earnings our our issued Poneman, webcast. Dan to callers as

to quarterly later our expect today. XX-Q We on Form file report

may of SEC on forward-looking call may about would All like to morning available filings, our that remind XX-K, also information the replay our website. of will everyone Centrus. that this uncertainty, on we future be today our later the discuss are X-Ks including considered Centrus certain risk information including involves be news releases available and call of of this website. and XX-Qs assumptions performance I this on A the and

may results those statements. differ from actual Our forward-looking in our materially

Form on factors Additional SEC, those contained and cause from to differ statements materially forward-looking report our reports in our could information annual on our filings quarterly with in that including Form actual the XX-Q. results concerning XX-K is

Centrus provided of to now expressed the Energy. Poneman. without call consent for the strictly form rebroadcast XXXX, of today, Any Centrus unless any and participation. Thank the written redistribution, Finally, your turn of call Dan I'll the May in information today over property accurate transcription, you forward-looking or XX, prohibited. is of And is call otherwise time-sensitive is only the as noticed. retransmission This

Daniel Poneman

of quarter profitability posted the of I report months returning on and first that revenue and Dan, through you, first Energy $X.X strong of today. to to X everyone a Centrus pleased XXXX. We to net total call of million million XXXX, a saw the profitable thank $XX.X had am year. and after Thank the in you profit

As am talent hard have this I unique particularly we done by the always, not proud the COVID-XX. without and all so together, work that we employees. under accomplished presented challenges incredible our of could of have

continue extensive of and challenges the masking the social ongoing including We quarantine, through presented pandemic and telework, realities distancing. the work to by

without been making most from from and our benefit have We long-term customer of deliveries fact contracts. interruption revenue that the stable comes our

a HALEU restoration the United toward production uranium American of XXXX, nuclear called We deploy completing will early in to Department it AC-XXXM centrifuges million support progress milestone or in making high-assay our first of in major fuel with reactors. $XXX our the of a These of next the are a contract on making also nuclear the the world Energy low-enriched X-year tremendous machines. to next-generation build cascade advanced stage of U.S. leadership HALEU production facility of demonstrate the nuclear NRC-licensed generation States, in and

pandemic some impact manufacturing the on finish and had expect challenges project we time. to has are supply working While those chain, through the on our

decades many remote years suited or at well to concentration performance. powers because operate isotope particularly number about it Advanced HALEU few a last months. reactor Energy's for locations. that on Program, of is XX and other of level the that are utilization, uranium including expected you cores major the As fuel for over it the of volumes the allows commercial HALEU but for which has fuel most is a lot smaller economics waste reactor Department uranium-XXX, fuel the cores, better reduced allows that and selected can advantages talked fuel microreactors under for or We've last ARDP, X demonstrations, are smaller, even Demonstration a low-enriched a with higher today. uranium HALEU standard HALEU. of enrichment physically for know, X of enriched reactors Reactor an fissile designs than higher program, Because

within HALEU-fueled is is a microreactor working The microreactor accelerate also at has development for giving within these Defense, X build Some to U.S. Idaho called be to Department Department called of National and years. demonstrate a years The X to U.S. platform a by which build their microreactor may reactors Energy designers The of transportable. even of Project program prototype mobile to Pele, a Laboratory help to MARVEL. goal technologies. test example, HALEU-fueled aims

HALEU of program other the The capacity part availability are civilian modest demand level While or name model. we the agreements, for expand Subject to large facility of funding deployment is, we of to of of ready deployment capacity building microreactors, in HALEU. a any reactors modular under microreactors even than are offtake the implies, a a have for development, military demonstration use, of as or production smaller capacity the whether but as result will meet we modest, demand. the the be HALEU to could

more XX%. million sales shareholder future the the our fuel into the Energy as for Atomic Agency that or enrichment at over for annual by their strong have exactly we in August increase per letter, with XX-K released through of work noted year supply by annual end November estimate separative an As particularly measured in secure activity from have have we we filing, new been generation what last SWU, nuclear global than power Rising X% end market which mean January demand seeing commitments. over utilities in sales Also, we our fuel, their XX% to International the had unit, of of lowest the for years. noted could XXXX. more could in by $XXX years. XXXX, to decade prices in to come point reaching More over last increased spot is next dollars than and back Since the tends double rising X prices

XXXX. the the of of rose increase the of million, first our million As order of end book $XXX to value quarter, $XX long-term the end about a from

turn financial more on Philip. the for the will details over Now results, to I quarterly call

Philip Strawbridge

and good everyone. Dan, Thank to morning you,

same LEU first total compared for of a the we XXXX, achieved had $X.X million mentioned, the for million. segment of Cost profit LEU increased Dan XX, of due of quarter period March for the sales compared million revenue Revenue primarily increased ended $XX.X increased the and the in in quarter XXXX, months As XXXX, $X.X volume. X the to corresponding million in to to net segment $XX.X XXXX.

Excluding legacy compared deferred average the cost sales unit quarter in costs the SWU decreased and last previously XX% year. sales, for to of

obligations tend month commitment quarterly. from to we've The then As the purchase customer segment and annual are that annual, our in before, of have revenue. record purchase report take quarter we the their -- generally the that we variability quarter-to-quarter because with customers see multiyear that not contracts what to when quarter decides in LEU mentioned we

fewer because we we more deliveries, better deliveries. while others worse have Some look because quarters look have

signed higher Another prices today, were source is fact some lower. they and prices of variation the others were than signed were are were that on when contracts

quarter that worse particular So look a delivering quarter. depending contract points we're or a can price in better that upon the of

Solutions in of segment reflecting March of million and XXXX performance the $X.X segment X-energy months received Technical in XXXX, increase $X.X XX, period in XXXX, same increased X work increased million work the reflecting contracts. to for increased corresponding -- revenue increased of Cost as XXXX, the contract the ended performed. the this HALEU Our compared to sales the in in compared period first quarter

years. expense, costs. the decreased million related talk the quarter period our to XXXX, price on primarily to costs. than our in We'll in by like stock. I'd a reduce were XXXX. back the to little $X.X compensation SG&A opportunities continue bit $XXX,XXX based offset about increase last In first are to same able incentive of million plans, as in other of SG&A We of to incentive by look in consulting obligations was which in over under increase $X.X have long-term costs our the compared remeasurement Now of spite a our SG&A we to including that our cutting reduction the areas, That at more a several

an consolidated quarter profit, even we or have As that net to $XXX.X with ended showed balance some the million. common of was $X.XX that on I'm of that $X.X on for of the under with giving to exchange, adjusted $X.XX basic noted That Without common loss common cash, we allocable net effect of million a basic preferred net may and the result a GAAP. strong basis, shares. non-GAAP share and $X.XX diluted a shareholders cash per of as a exchange you was income far the diluted. share sure per

turn call to over going I'm Now to back Dan. the

Daniel Poneman

Philip. you, Thank

next in nuclear United the very but an actually several is time thought fleet enabler final new form year the generation And States of of of so As for to this the looking usual, potentially XXXX, program the HALEU one a training that first we risk company. early in to under the are development. moving forward entire demonstration but offer about all challenge, is not advanced working reactors the a that that producing for much forward. of this been new demonstrate production we're exciting complete hard The America industry now years, to of the only has me in fuel importance let seeing,

been company. So that, large. XXXX there months last the date developments But for for red beyond several this several letter in have industry is a writ promising

source sustain through Significant X/X are markets nuclear goals. either clean always-on Plan fuel the efforts of and resilience procurement. power the to power. existing fleet the example, contribute jump-start to half as also energy to our power American of Jobs of part For administration's full specifically over our our reactors of climate don't advanced of efforts mentioned reactors, which tremendous the carbon-free recognize manufacturing commercial underway Unfortunately, Biden of nation's contribution value this its energy or but federal

put look forward this importantly, industry be to any I these the you the want work value of supplier. about Once for the future the and emissions build energy about know for consideration you, call, So entertain of years. have our and of fuel source country. encouraging for We that are confidence what We at questions and trust of discussions, for needs solar a trusted Centrus. to the the again, through electricity. hear continuing commitments stand to carbon-free come like supported need that support proposals to being nuclear now similar for energy rising sources it nuclear energy given credits meet to the require the meet these many serious to growing currently don't global industry to is expansion a renewable but all industry nuclear segments we'd for tax nuclear for our to the U.S. The for for as to role optimistic that wind you those ready available. happy provide reduce more of updated and might and the time. country both joining Operator, have thank the yet is We carbon-free business to in will reliable largest and of for

Operator

[Operator comes Instructions] Our line with the Lake Markets. first question from Rob Street Capital Brown of

Robert Brown

environment My question the activity. kind on for is of utility

is it of playing kind timing the you the or is number just coming on a year? that of new mentioned You through. cycle? of go there orders out through the anything that driving How And sort as is reorder

Daniel Poneman

Well, there's of -- a factors. number there's question, Rob, the

market till was from then it August fuel price perspective the if $XX. demand SWU market. was the at to go XXXX, recall $XX, $XX, there think a you you withheld XXXX good the basically in While secular price it of look buyer, of of so doesn't you is if the the When buy decline, from at that the from lot of the a see

are so prices that's So right? get the as one dynamic deal is the factor. than utilities that one And later, rather rising, sooner would

is the at was working doing they they which factor market, what were down off demand long inventory. were period during Another that keeping

them down. being to the able of out has of also gone So stay the of to cushion, kind market so speak,

So purchase. of and overall environment I market in commodity prices get combination there think and in a not rising frankly, people it's and into of expect may factors, age nuclear continue a really prices like bullishness are the that that to does that make rise the fuel, an with spoil to an incentives

Operator

Our comes from question with Capital Fels Group. Odeon of Instructions] line [Operator the Richard next

Richard Fels

questions. I have two

who we to alluded specifically they to where since and we've haven't the in of calls, America And you Can U.S., done us I'm may the American XXXX, in were be in previously in Jobs uranium in to you up the up sure that several Plan Energy the North they talking guys start Act of miners opening uranium last XXXX. the process enlighten that the on U.S.? we the who are the were anyone on mining? not which uranium So to mining, should, or past. outline start

Daniel Poneman

Okay.

you thank to question, me One Richard. all, of make -- Let first -- for just one clarification. the

is said the the often shut old are have down this in Paducah, last we Cameco there's Energy Kentucky. since that there to the thing headquarters, plants mining the have on of have entities and a But that other that enrichment Ur-Energy, when been the thing, XXXX think gaseous I number diffusion companies, company are no uranium U.S. predecessor mining foreign may the properties UEC in U.S. there Fuels, of but such as

strategic So demand standpoint strong that that the country future And that, see the I the important in of right out a mines you've there's think to been interest strategically energy from those coming reflected uranium Congress administration sector. as the some the the view of in a resource additional both seen base of given and them. are and will the you to whole signal, kind to production

it not chain, up Nuclear was reserve include in a to started. that natural -- uranium what has of the Group a is in the the budget see million chain, reserve. fallen in that you If the was. the then setting one of compared conversion gets people see when $XX comes this thing happened fund get which to course, Fuel And in production cycle that at That terms mining, levels up out, last that for about see yet, but to next in So funded additional is step running, the to of cycle thing uranium step. in from of to budget very was there example, what new which that value next of resumption budget once thing U.S. the and waiting talked would a mines, low are and that has Working level -- uranium funding reserve happens report just uranium that April also will, which not fact, XXXX,

Operator

of Group. do Richard Capital Instructions] another with Odeon the have from line [Operator We question Fels

Richard Fels

Yes.

that you think Any I I for should production off. benefit Thank explanation. I think? got LEU, cut domestic would

Daniel Poneman

the say the ticker, you're think I So. to commodity, referring you Well, LEU, when right? not to

Richard Fels

Correct.

Daniel Poneman

missions. as replenish use need mission. foreign think origin from able Let supply origin highly from me a lot, carriers And reactors technology to of low-enriched means ready that only you that to actually that we guess uranium stop, in mined uranium enrichment why also foreign jot tittle our the you a can for produce converted U.S. there And deploy, we is nuclear U.S. that of satisfy this might and a imagine, needed have uranium enrichment any we, And which have of to submarines. national it the enriched easily now you that's earlier question. continuously security weapons. base, that tritium, a A uniquely well, miners not U.S. I for lot uranium possess are is country right? I facility. for technology and your to of Centrus, must We important Centrus into ultimately to that Look, that, put -- for And way. go I we reservoirs uranium the for domestically sources actual production answered -- period, every rest of uniquely enriched full and come as that's the possess is say means from comes to are is the unobligated, which and U.S. enrichment, not policy a security that using that's in available we the legal uranium conversion national aircraft constraints enriched on that tritium

kind this who uranium that's States supply U.S. any as security see to a uranium a enrichment. back used inherent on of as chain of each And reinforces world the So that alignment an we an recover way. at used like lost get to as there for were see stage the is demand-pull we natural well in because U.S. that about purposes, signal when reason, for that enjoy leadership conversion talking well LEU strong enriched indeed the news or focus good for any as on time United for such one -- signal interest for national and element that you that all creates other. to of the unchallengeable those It's

Operator

question comes the of Markets. next Brown Rob Capital line with from Our Street Lake

Robert Brown

up the goes DOE Could you from remind when the project. I the maybe that just Solutions really on there demonstration that time on the follow the business to HALEU And on then Tech is project where wanted and and thoughts line us next steps produced? there? -- your how

Daniel Poneman

Rob. Thanks, Yes.

and really we been as on because well for now regulators. finishing year, expect track -- work in actually on enable have our due very Piketon, EPC working Ohio. standing we et the et it's had machines thankfully, demonstration to and we have because the all license XXXX. But mentioned, supply next I up We're are begin course with an COVID. And challenges early we've will chain of in cascade XX cetera, we actually And cetera. NRC So to tough the early been operations doing all work, the has that us

mentioned, will point, that -- running rolling on you But forward the that program just like the cascade, we a order don't to this at we capacity year. if concludes. at program of over a course about of, after don't the I've So point, produce we X have, as kept metric have a ton

under be next that your do the the fuel fourth only expand HALEU important the that but we HALEU only as sample So times Advanced question, that's source U.S. once and entire XX of once this for fuel. will step of of out several Reactor mentioned be and generation And would awards cascade. the X hopefully -- to Department industry capability second the U.S. require your the not demonstrate it's Program XX.XX% we for us, because Demonstration actual we've this to for to of part actually received deliver frankly, Energy, reactors the important,

of one on be which that for that And reflected important of I calls And possible that to to it's that's, Advanced the to so for Act to think, bullish that us XXXX, frankly, expand is by purpose then very XXXX. the if available satisfy is tranche Demonstration for Energy emerging going sure well reactors. HALEU there demand rapidly new as the in on Program, department Reactor make as

Operator

the next [Operator Our Capital Group. Fels line with comes question from of Instructions] Odeon Richard

Richard Fels

Okay.

you is for on How for And the first investors? than second So excess using you Thank plans thoughts there very are the business. what operate enough he returning to Any keeps question the my on growing to putting me the it color question. my helpful. on mute. planning certainly are It's more it's cash? because that,

Daniel Poneman

Thank you, Richard.

start I to and I'll then So ask I'll, Philip this think, augment.

So we highest everything of good capital frankly of thing and cash process analysis position ways -- our cash and obviously, you'd strengthen from further position. of continuous strong us have for this continuous very best to of options looking a to imagine, uses resources. structure. as for our And have, It's the the those continuous been, a and analysis include

for do important the in tender for of transactions the the the Solutions these that's benefit we extended of moving stronger investment whether had on developments and those us And streams well so you're in our to LEU use both a tender taken a load of I and to provide we one we've we resources added very a side We we But financial position. that and overall. to put that whether the aware, of for to management that side they far, overall Philip, it rolling the other color? analysis things we we the We initial you for major further that the because revenue all an much know, as benefit our apprised being had offer maturities as some generate could our a position use and want Board continue I exciting And lot course, besides. company XX% forward out found of strategic as may from forward in has offer technological have resources. XXXX. ultimate the things Each Technical the that that in said, these reduced stronger by or from preferred business new the steps use of for the of debt a turn our And perspective. oversight we keep very business cash help preferred you is, better -- of actively

Philip Strawbridge

said think position, business. as active, the as Actually, we been Dan, sure it Richard, as looking you're strong want you you Yes. well. in debt and got it so make right, invest as very a certainly know the we've both properly. that to mean we've utilize Dan I at and we But I mentioned, cash preferred well

Operator

questions, since for that, I call closing with turn to like the no back there Leistikow to further And would are now over remarks. Mr. any

Dan Leistikow

look our will This of to investor speaking want in XXXX. you next of conclude call online. again with operator. for to you, quarter. who thank all the listened quarter I forward or Thank first We called you

Operator

This concludes today's teleconference.

at now time. have Thank disconnect lines your for may you participation, this day. a wonderful You your and

Centrus Energy (LEU) 14 May 212021 Q1 Earnings call transcript