LEU - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to Centrus Energy Fourth Quarter Fiscal Year 2025 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. . It is now my pleasure to introduce your host, Neal Nagarajan, Head of Investor Relations. Thank you.

You may begin.

Neal Nagarajan

morning. Good for all us. joining you Thank cover Today's quarter for fourth results ended call December will XXXX XX. the the Today, we have and Amir Vexler, President and Chief Officer. Kevin Chief Financial Harrill, Executive Officer;

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

year our We the full XX-K for file and report on expect later today. to quarter fourth Form

XX-K, and this leases on X-Ks SEC be new XX-Qs our our website. of and website. available including replay available of call our on All the Centrus morning are filings, also later A this will

involves remind call including assumptions risk I to everyone would of this certain about the discuss today future information like considered we performance be on that and may may Centrus. uncertainty, that information forward-looking

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

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

is retransmission Finally, the in This sensitive for property consent written forward-looking any strictly Thank Centrus participation. the is without call prohibited. today transcription, otherwise today, time XXXX, you of your provided information as is and accurate noted. Any Energy. the expressed of or February X, rebroadcast the redistribution, only unless form call of Centrus

And I'll now turn to the call over Amir.

Amir Vexler

the going his to the continuing the is welcome to everyone He out I'd a of core to this function time. today, team another to brings example and as to to forward. meet of of time. the Dan for role as a and continued enrich thousands significant wealth to while and the support Investor across Thank long-time of us and year Head made Centrus' of joining This process. our fronts growing I role Relations. on call our in bills pivotal effort success first also at creating for for our America's you ability service is to you, jobs quickly previous security restore Centrus build of experience to of like for thank all corporate efforts his continued and hiring needs Neal, thank nation's another and new communications like would his Neal number national Energy energy in this the both progress us we uranium listeners

HALEU won sales the LEU successfully for As with previously contingent strategic award long-term a DOE commitments operations announced, company past delevered under continue quarter, we and pension balance through deconversion, by on [indiscernible] and our award $XXX.X winning plan. associated through to backlog first American-only award senior enrichment to position a contract convertible preparation of capital derisking this X contract. in a manufacturing of to DOE notes. Department date advantage by issuing the for delivering to strengthen million of XXX center Energy operations our And billion our This with enrich fuse progress supply HALEU HALEU already HALEU Accelerating chain sheet the Phase total DOE. the contract we to mover of our kgs a this further continued our while won grew strengthening $X.X XXXX. initiatives contract of year, Signed contract DOE and for

figure, price segment, from multiyear generally of results. where many the annual each first, at our annual and revenue have delivery of customers LEU given results, saw into the contracts let our as that quantity [indiscernible] take recall to given But shortly. is to dive will dynamics with we the a our majority year. me a industry our accomplishment, of Outside continue discuss I shift Starting in quarter's

year. and don't customers previously deliveries quarter every take their our have the annual choose quarter stated, to we which same As choose

year full of we of $XX million the million. $XXX.X operating revenue, an $XXX XXXX, income gross a million in achieved and profit For

in even solid have revenue and growth LEU our trade strong segment actions. deliver as continued a we to We margin number work of through

U.S. planned of Department inputs Energy, all from have and We XXXX. our XXXX of allowing in waivers secured the

through the XXXX XXXX working a the our each now Meanwhile, the shipment. general with for the government the process department. Russian States November, are requires from license Russia We and for to license specific waiver United that Tenex at supplier revoked and material in exporting

export to our informed orders. satisfy We pending received have licenses to X that been specific XXx LEU has date to

use to pending its to obligations Tenex our orders supply additional informed will of basis. and the pending of on licenses under plan future to delayed orders. us to single the seek delivery XXx We contract satisfy LEU has a export majority a for the customer the

We close customers orders as future well with any disruptions to may whose with impacted be are in delays. TENEX communications mitigate potential our or

to Turning operations. our

contract to both won LEU competitive enriched LEU for first contract a December, under me and U.S. contract low Loan-rich high assay dependence LEU Let or American reducing sources enrichment, X ERFP, from or In our restart to jump won the foreign then American HALEU. we And a discuss enriched solicitation uranium. of we will October, These won are awards uranium uranium state-owned conversion. which on in production DOE. enrichment HALEU awards we and of award HALEU designed provide funding the

eligible quarters definite were quantity delivery and contracts we meaning as contract. for awarded compete each these under reminder, are In that future a definite to As essentially IDIQs. task

on value each, under for contract. win. and DOE and contracts compete quarters issue Next they each hopefully of task the expansion will be the scale past the will the will step ultimate to process we dollar The in of for our orders depend the support

than bipartisan are more Act approved Reduction were in appropriations part aggregate the backed of the March bill These Inflation billion that by as X XXXX. XXXX $X.X funding in in and contracts in congressional government

Centrus fuel chain quarters. and is the an to task to federal to case largest uniquely made receive decking. under represent American-only positioned jobs. these the a in that supply support they to in solution investment manufacturing strong American nuclear together, We funding uses a deliver Taken domestic production future government robust made-in-America

for up to We license company under a enrich to NRC just and with X to NRC LEU. uranium only are the X enrichment American HALEU within XX% of technology proven and companies enrich an license

we the foreign U.S. mission. capable to U.S. those national technology facilities truly will capability origin strengthened deployment-ready uranium mission, support jobs creating enrichment family-supporting security technology American The the meeting enrichment talk our while be for strengthen the That's by Centrus a important government security security high-tech energy requirements. argument our for domestic further because workers. and national used pretty commercial national federal Restoring choosing is that and using secured have needs enrichment cannot enrichment of technology only a for

machine deployment in the In facility request demonstration Ohio or Administration Security enriched the support Piketon, a fact, ACXXX defense National at design for uranium. late information, an XXXX, NNSA mission for Nuclear issued or for to Center Fuge requirements RFI, NNSA,

that We decouple offers the the position money technology we and all would in ready are our a to push. viable. U.S. U.S. autonomy proven support a American agree be what We that sells public a enrichers. energy America back technology need tax to, to secure the our believe in to an European this needs American keep put help their U.S. payer this foreign be state-owned to needs. national security in from government partnership along commercial both will and support has government it influencers Centrus American in alternative. said but We while keeping And turn, to fund private jobs governments with American

shortly, discuss groundwork will lay ahead Kevin to quarters being As begun we issued. have the of task

in comes chain U.S. investing over serves manufacturing months. closing strengthened of we quarter, we [indiscernible] currently an process balance significantly fourth This reactors facilitated state-owned expand of quarters of kick domestic supply capacity investment manufacturing our nearly in in move the Centrus' This our production. foreign announced notes. by huge to to And investment XXXX million our our XX already center and of the begin late reinforcing electricity enriched nuclear starting power $XXX the approximately for production And ability U.S. at sheet center next activities ahead facility as required our while $XX by future. uranium XX% resume from being advantage over accounts the for of convertible issued. In huge million entities. derisk Nuclear to November, our government all first-mover

for There With penetrate. imported Russia, currently a replaced enriched that know large need from the we in addressable ban, Centrus to that approximately be uranium is to Congresses XXXX. is existing enriched uranium market will of XX% starting

recently Michigan that Station. about at [ hear Arnold to month old project ] to announcement santeCooper's reactors complete continue Samer [ most to Wayne We Iowa back ] Palisade seeking from Carolina in the South VC Nuclear buyers online is it coming and in

there then avoid to of We is existing newbuilds that over the are upgrading opportunities. fleets also term. know many near And their utilities potentially costly international considering reactor

off second prospects such include the we investments considering that of This companies of sales of as share large a could $X is they have from reactors markets In billion nuclear's or LEU secure as of commitments half build need and But to date, tech on in that in nuclear big total customer contingent of sign unprecedented further the continue that of this growth. Credibility otherwise to secured the energy, a opportunities nuclear supply in Piketon. and cumulative and well more new to up number Europe growing announcing Then LEU is rest in that customers. XXXX, Japan. are the historic market as competition. demands These deployment support accelerate ramp cannot more and there's market our additional production in of capacity we a To energy just heard energy. market. growing utilities approximately clear we nuclear

are turning Centrus to they Energy. So

and building our excited very are about to We prospects on forward our momentum. look future company's

anticipated more which calls. groundwork begun to for you look to ahead forward have with the government's We and the quarters sharing compete of laying we on plan task upcoming

I numbers. to the to that, Kevin through walk turn over call With will the

Kevin Harrill

of of exhibited Thank reported increase Centrus another revenue nearly year-over-year XX%. by morning, everyone. you, a Amir. to exceptional year accomplishments, Good

of $XXX.X tax profit leveraging income including net addition, our initiatives million pension $XXX obligations, these accelerate majority significant investment compared finally, to to revenue, partially reported $XX.X We million our capital In XXXX time for company $XX.X manufacturing efforts In its our compared a an identifiable and million deployment raises in optimization the in last equity the efforts. investment gross capabilities markets, increase and and to the $XXX.X we strengthening position, . yielding in opportunities own prior million cost SG&A million and our undertaken XXXX, of to $XXX.X sheet the generated to production; our to structure, year. plan reducing year. debt balance generated improve compared has million to reductions, cash in capital fund credit of several in

sold. The revenue. of in to partially volume $XXX.X in a offset was in in generated lower uranium SE increases the million the driven average price growth of business compared uranium an uranium rising to improvement SWU revenue driven in volumes and XX%. by commodity average revenue LEU by of contributed The uranium prices revenue, margin result Our growth over XXXX, higher so increase year-over-year growth a $XX.X of our price sold. Furthermore, and largely by was million by sold, both

of increase unit to an the to cost cost SWU a Our increased sales $XXX.X SWU cost. average in uranium in $XXX from XXXX in sold. million of due increase as costs a in LEU in increased million result primarily average SWU of in XX% XXXX

price the million is SWU of to at previously sales, which to the $XXX cost the Of costs related the release XX% the time incorporate of deferral. deferred attributable sales, higher of

Excluding have the only sold deliveries, of increased deferred average SWU impact the cost would XX%. these unit of sales

$XX.X As increases increase our the year ended LEU XXXX. uranium costs. in mentioned, million segment in uranium to gross in sales with similar of drove million $XXX.X for a profit We the the I in reason compared also

in which Our million Technical generated million improvement $XX.X also of gross over the Solutions was an prior segment year. $XX.X profit,

of profit on $XX.X to and compared in a XXXX noted, $XX.X $XX.X $XXX.X an gross gross million of million million an Technical previously sales compared our million increase to million $XX.X Solutions generated a year. $XXX.X to As million profit was compared of prior consolidated cost prior increase of the year. in the reported revenue, basis, in

is reflect a of incentive operation which year-over-year share which transition basis cost-plus Phase from arrangement a cost the HALEU results II arrangement. contract to X, was fee on a Our the Phase

to total was Our backlog extends of billion company and year-end as $X.X XXXX.

in billion primarily $X.X and and $X.X contingent deliveries, uranium backlog fixed includes billion billion future segment Piketon, potential in of at LEU was of SWU long-term of sales Our with construction commitments and under support contracts commitments Ohio medium- approximately LEU capacity facility. production LEU $X the and

private sales the of depend and into substantial to $X.X secure contingent billion During The the commitments. billion definitive LEU fourth in our to quarter, agreements we public commitments continue total contingent for $X investment. sales entered ability on LEU

Technical amounts approximately company's and billion contract. unexercised amounts, HALEU and includes The unexercised $XX funded Solutions operation segment the options. related was Our backlog to options unfunded

we offering deliver execute As proceeds our of Amir convertible for noted, of strategic million of in The announced million. Ridge, the $XX senior $XXX.X issued from fourth and the notes for plans quarter, total our for X.XX% added $XXX.X proceeds to at liquidity XXXX. a Tennessee including facility in November our capacity expansion investment that of resumption million Oak announcement activities manufacturing we Centrifuge the net manufacturing

by on funds, the a our consider our of approximately other bearing of by principal made derisking value notes convertible our reducing which $XXX obligations including issuance notes also million. will X.XX% sheet retirement these the higher We the follows in million. plan possible balance uses XXXX have strategic of The progress further of pension $XX.X coupon, interest

at we of pension will savings remaining of obligations excess funding substantial have million beginning associated reoccurring plan responsible. the these was annual which of ongoing requirements for with the the elimination $XX in As through with funding as the level the shortfall management the ultimately of XXX%. fees, administration, year, of as company a regulatory asset have planned in well realized the end year This costs

positive and pension successful debt the unrestricted convertible the an million. coupled close contributed the with Our continued of reduction transaction of our balance $XXX.X to cash plan of operating ending obligations results,

as Ridge, contractual To exploring investments and facilitating in a project Centrus an growing credits. as we investment a manufacturing well October long-term eligible January facility XXXX allocations meeting cash The in approved near-term notification and our request $XX.X application for for manufacturing the our position including in of we certain is tax credit be of that energy end, in property. In Maintaining 'XX, strategic for on opportunities in future. for future engaged obligations continues clean predicated our company strong million Oak recycling for credit. a in in to key also execution submitted requirements, this were investment received

execute restore initiatives of structure, ourselves our All to enrich optimize of strategy and ability at adequately the position manage scale. our to to a on a better and announced broad uranium cost to our risks, to part America's continue investments are vision

that, With me back to things over turn let Amir.

Amir Vexler

security. through of of growing national to the of the of as enriched to about particularly administration. and growth. importance continues both about heard record the a to Thanks, parties We've close to and confirmation Secretary moment fuel testimony support discuss protecting Kevin. production. official and we've There the year, when incoming long We've bipartisan is enjoy new economic talk Nuclear power I'd taking uranium. appears a Energy, by energy to resounding came production importance to said, seen to need the Chris comes bullish nuclear new the historic administration heard about like partisan approve together support. by has investment of it to nuclear and last a American support about security, be jobs heard in restore domestic That American-owned Wright's

enricher our centrifuge We the only manufactures are United in that the States. also actually

and for In least Capitol which supply September, includes on one workers chain, company American XX of policymakers we held major them, unveiled suppliers. states. an at domestic in our briefing employing American Every XX the Hill manufacturing

efforts win manufacturing presents to American to a project independent. the and Energy President restore deliver his opportunity a major Our in perfect for American

once-in-a-generation U.S. is our leadership this I cannot afford As to reclaim nation previously and a noted, opportunity [indiscernible]. to

rightful towards as as excited the enrichment to continued is domestic in market customers. for evolution to the and both in are We come reclaiming XXXX America's global well what market place service by our

take would open questions. to the lines Operator? to that, With like we

Operator

Today's Lake is Instructions] Brown first coming Street Rob from Capital. of [Operator question

Robert Brown

and task to maybe -- Just of task to steps the orders follow want the orders on or getting wins decision-making sort could give a those issued goes the up on needs timing? how contracts, of just I sort on you on what X and the contracts, wanted the -- DOE sense to the the do a in of next thinking sense process

Amir Vexler

mean, speculate I so timing. moving know have -- not That's I that Obviously, a awards been I they're on would question, is there given movement. honestly, Rob. -- good we forward.

timing. would on guess not anything -- Just I

I to And that encouraged too as first that. on would think was question I forward there we it be paraphrasing. hazardous other add your said, are But announced, say been is there's any can movement. in we if believe, to what's color I already

Robert Brown

Yes.

process. steps the the of into next Just sort that go

Amir Vexler

Yes.

specific no task the those steps and So would be the have the And really that department the into awards. we timing. would again, quarters insight next . issue

Robert Brown

Yes.

investment talk you color orders that about Can things. million the kind to they into a get in you if goes us to to as then And where on did react compete? give of through really that jump-start a $XX what terms position a you puts Okay. of your tax and come they

Amir Vexler

Yes.

all these as So sure out. are those come of that ground hard we make when fast We hit we can as to the running really, connected. things want

that us prep our work. readiness but don't add else, that's of So in anything Kevin, would And I level. investment sort at do readiness. to high know, that . you if allows want a a our lot of call I to

Kevin Harrill

regards that's that our And talked chain we've of is public trying standing with about production. accomplish, think our to required some supply Yes. move initial additional cascades, be important wide-scale time up we're to to going is the No, the to we as distribution and there deployment what forward for element with that's of and I right. and associated

to back a many to and for are we're is mover owned accomplish company. bringing being to perceive our of States in United trying order enrichment to domestic us that as the invested the to advantage things regards and processing And we continue what start so this money first in basically

Operator

Capital Reagor ROTH from The of is question coming next Partners. Joseph

Joseph Reagor

on thing arm some I magnitude overall of of congrats even of, first if wave on getting So specific context to things, an numbers positive it. XXX, is a the in around But X,XXX news not licenses order you're rather give there. like it's going the XXx on out Pacific know obviously, it specific XX, than number. Three

Kevin Harrill

can't the provide Russian came put States. regards have is last late ability Yes. to What XXx exporting year, the of distribution of to uranium pike get that United part in details, Russia the enriched to disclosed our of are a types the specifically in we that down We pause decree the as the their reporting Joe. into outside a for of provider and

traction And we good our under to -- or shipments of but the it Russian basis. on was have by seen so basis deliveries on with decree individual regards case by a crafted ship shipment several a those, and as

So seen and can't we've speculate X we I future. over [indiscernible], going but the first on our right said, what's transpire now, like speak in to traction positive

Joseph Reagor

any question second of enough. QX, sales Fair advantage taking million but November? uranium I to drove high. Okay. the Or that is were this market? uranium in an ask. This just usually, is had that on the to abnormally -- is you inventory revenue rate, I this of $XX in reaction guys Then what in heard in tail they did sell opportunity like the

Kevin Harrill

historic market. is a levels, in of This an advantage is taking of Obviously, upwards the kilogram. [indiscernible] opportunity at UFX

the for and was this that were December cycle. up sale results the perfect spot annual recognize get key counterparty frame to So where with that and us in helped able reflect of our opportunity time to a we a matched

Operator

next Securities. question from is . Pfingst of The B. coming Ryan Riley

Ryan Pfingst

that line the is on million in the fair kick about commercial say in time to bring November, officially looking starts that, cascade? XX-month first $XX were it the you're made regarding November announced First, investment to

Amir Vexler

characterization. that Yes, accurate is an

Ryan Pfingst

results, the just question, was prices. quarter maybe following last of the on driven then strict by price fourth for up And [indiscernible]

that you else know to anything there we your compared in guidance, could that could don't XXXX? see about give XXXX, for was wondering, XXXX? but drove maybe strength maybe talk Just that there directionally expectations I you

Amir Vexler

No. Yes.

guidance. we noted, provide Ryan, you don't earnings As

very will go especially opportunistic, certain is little definitely to transactions on So uranium can in are the replicated it's be difficult What we I a periods. to details the as side. into future whether say

look our in you sizable sell to it amount at and and our for relates really balance monetizing to sheet. do left the a of which We have on some position spot specifically the statements And a perspective. us a those transactions is of financial as so X being rising when helpful from still is sale side. market in inventory that a

think do I the couldn't climate the go power have more details we'll and dry I opportunities continue economic balance have, So And if to into commodity that. obviously, up. on any we but on the come sheet we evaluate that pricing. think reflected, still

Operator

next question Joseph from a The coming Reagor of Capital. is follow-up ROTH

Joseph Reagor

it tax and and I that? to I million release spend of credit would just take more. And had one talk that from . then period back. about $XX-some-million that work trigger you if get time? and then guys what like in What the investment standpoint? over noticed And a all $XX-something of accounting does how an

Amir Vexler

Yes.

put we So to into from there's need initial subsequent time which which X-year that and the X-year should and can could frame which -- the put this conditions the X property we'd touches the is we CAPC that say, this cost period years time certain X costs the stipulated is or the with conditions. would there actually then to then a frame. legislation all you time we the upon But frame are able its in and within ultimately, bear basically have life in a capture IRC, a thereafter put meet after and realize approximately to And XX I of years. be useful perspective, few time timing

by established government look at can to that be how when we this monetize and a these. able we the can so realize into sell monetize marketplace and and what's we'll go And this, actually out is you been

that upon be that will your you continue that trying clock, at support won't And basis, on of of all about will this NOLs. did the to we're own. be our a look I the investment cover government what to we global was incremental that anything? the have these starts on the that questions, accomplish conditional So funding to able the obviously, initial Or come necessarily when XX-month I subordinate we'll And it Joe? that will missed out process investment

Joseph Reagor

think question covers to to guys you one XX about maintain follow-up just previous And time the then the if the the now gist need given of that the months. assignment the by be kind in I task would that frame order I of you've it. could, caller's when to started clock. XX-month

me Kevin in and just what Let maybe my Kevin, please step clarify if clarification, said and clarify needed.

We months, would process are just making the start a an we to not as process investment to and that quickly and improve standpoint. from jump cycle time have on than conservative will confidence any officially I starts. make want in when as start sufficient Obviously, to aggressive fourth we I clock that's the get is assumptions the possible, the come. a more stick to that which XX

work, aggressive position the in Now sure make point and time, money make spot. again, XX that we're doing of possible not let's we best improve But a lot that. ourselves more we months let's assume and and assumption than the to of anything this cycle we're officially, at spending

Kevin Harrill

Okay.

production higher on Oak monies. Ridge in the to levels. just this where Just of, be in But where equip as -- I start start in facility going predicated a derisking putting level all that's government announcement, the of we be operate position to our will was mentioned earlier at us at a that. the in to the us I yes, with to a enable we supply chain, process to going can we add state call, November

basically jump X to we So to the on is $XX for tangible would off the for task orders to as relates us side. start the allow XX-month us the handed funding million to us from that to to us this, government months to some to enable trajectory be over but government announced start a we've it sort next looking XX of that the baton have continue

Joseph Reagor

Okay.

that think it. was little a I before. confusing clarifies It

Operator

for Mr. back this floor like over you. Nagarajan Ladies and the Thank to I gentlemen, to time, closing turn comments. at would

Neal Nagarajan

Thank forward thank concludes our call you, the called This again of with we and speaking quarter analysts for to XXXX. you quarter. like the look Donna. I'd our next year-end and and who fourth investor all in, listeners to

Operator

Thank today's you. Ladies and event. gentlemen, this concludes

enjoy You at log your or webcast of time, may your this disconnect the day. and rest off the lines

Centrus Energy (LEU) 7 Feb 252024 Q4 Earnings call transcript