Financial Highlights
- Gross profit of $6.3 million
- Net loss of $0.4 million on
$35.3 million in revenue
- Consolidated cash balance of $168.5
million as of March 31,
2022
- Long-term order book valued at $1
billion as of March 31,
2022
Business Highlights
- Continued to meet all milestones under the DOE HALEU
contract
- Completed conceptual design for commercial-scale HALEU
cascade
BETHESDA, Md., May 5, 2022
/PRNewswire/ -- Centrus Energy Corp. (NYSE American: LEU) today
reported a net loss of $0.4 million
for the quarter ended March 31, 2022,
compared to net income of $5.1
million for the first quarter of 2021. The net loss
allocable to common stockholders in the first quarter of 2022 was
$0.4 million, or $0.03 (basic and diluted) per common share.
![Centrus Energy Corp., Bethesda, MD (PRNewsfoto/Centrus Energy Corp.) Centrus Energy Corp., Bethesda, MD (PRNewsfoto/Centrus Energy Corp.)](https://mma.prnewswire.com/media/840946/Centrus_Energy__Logo.jpg)
"Our first quarter results reflect the quarter-to-quarter
lumpiness in our revenues and margins that we discuss in our
earnings call each quarter and do not reflect our annual
performance -- and we continue to see strong opportunities for our
future," said Daniel B. Poneman,
Centrus President and Chief Executive Officer. "The unfolding
tragedy in Ukraine has catalyzed
the nuclear fuel marketplace and highlighted the urgent need for a
robust public and private-sector response and investment in
domestic uranium enrichment capacity so that we are no longer
dependent upon foreign imports. With the only US-owned
enrichment technology and a Nuclear Regulatory Commission license
to produce High-Assay, Low-Enriched Uranium production as well as
Low Enriched Uranium, Centrus is well-positioned to lead the
crucial effort to bolster energy security for the current and next
generation fleet of reactors."
Financial Results
Centrus generated total revenue of $35.3
million for the first quarter of 2022 compared to
$55.6 million in the first quarter of
2021. Revenue from the LEU segment decreased $20.4 million in the three months ended
March 31, 2022, compared to the
corresponding period in 2021. The volume of SWU sold and the
average SWU price both decreased reflecting the timing of customer
orders and pricing of the particular contracts under which SWU were
sold during those periods. Revenue from uranium sales
increased to $4.9 million in the
three months ended March 31, 2022,
compared to no sales in the corresponding period in 2021.
Revenue from the technical solutions segment had a slight
increase of $0.1 million in the three
months ended March 31, 2022, compared
to the corresponding period in 2021.
Cost of sales for the LEU segment decreased $10.6 million in the three months ended
March 31, 2022, compared to the
corresponding period in 2021, largely reflecting decreases in both
SWU sales volume and the average SWU unit cost.
Cost of sales for the technical solutions segment decreased
$4.3 million in the three months
ended March 31, 2022, compared to the
corresponding period in 2021, which included a rent credit
related to the Piketon facility of
approximately $1.6 million. The
remainder of the decrease was due to a reduction in costs of
approximately $6.9 million associated
with the HALEU Contract, offset by new contract work of
approximately $5.2 million.
Centrus realized a gross profit of $6.3
million in the three months ended March 31, 2022, compared to $11.7 million in the corresponding period in
2021.
Selling, general and administrative expenses decreased by
$0.7 million compared to the first
quarter of 2021, reflecting the company's ongoing efforts to reduce
overhead expenses.
Net loss was $0.4 million in the
three months ended March 31, 2022,
compared to net income of $5.1
million in the corresponding period in the prior
year.
HALEU Update
Centrus continues to meet all milestones under the HALEU
contract to date and expects to compete for additional funding as
part of an upcoming contract to demonstrate and operate the HALEU
cascade; the Department of Energy indicated in a February
pre-solicitation notice that it intends to issue a solicitation
soon.
In addition, Centrus recently completed conceptual design for a
commercial-scale HALEU cascade that would have 120 centrifuges and
a much larger output than the 16-centrifuge demonstration
cascade. Each 120-machine commercial cascade could produce
approximately 6 metric tons of HALEU per year. Subject to the
availability of funding and/or offtake agreements, Centrus' could
scale up the Piketon facility to
accommodate whatever level of HALEU production is required and
could also produce Low-Enriched Uranium for existing reactors if
needed. The Piketon facility
is large enough to accommodate thousands of centrifuges.
About Centrus Energy
Corp.
Centrus Energy is a trusted supplier of nuclear fuel and
services for the nuclear power industry. Centrus provides value to
its utility customers through the reliability and diversity of its
supply 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
of fuel, which is equivalent to 7 billion tons of coal. With
world-class technical and engineering capabilities, Centrus is also
advancing the next generation of centrifuge technologies so that
America can restore its domestic uranium enrichment capability in
the future. Find out more at www.centrusenergy.com.
Forward-Looking Statements:
This news release contains "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934.
In this context, forward-looking statements mean statements related
to future events, may address 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.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain.
For Centrus Energy Corp., particular risks and uncertainties
that could cause our actual future results to differ materially
from those expressed in our forward-looking statements include but
are not limited to the following which are, and will be,
exacerbated by the novel coronavirus ("COVID-19") pandemic and
subsequent variants, and any worsening of the global business and
economic environment as a result; risks related to the war in
Ukraine and geopolitical conflicts
and the imposition of sanctions or other measures that could impact
our ability to obtain or sell low enriched uranium ("LEU") under
our existing supply contract with the Russian government-owned
entity TENEX, Joint-Stock Company ("TENEX"); risks related to the
refusal of TENEX to deliver LEU to us if TENEX is unable to
identify an unsanctioned bank to which we can send payments for the
separative work units ("SWU") contained in the LEU, or to make
other payments under our supply contract with TENEX; risks related
to natural and other disasters, including the continued impact of
the March 2011 earthquake and tsunami
in Japan on the nuclear industry
and on our business, results of operations and prospects; risks
related to financial difficulties experienced by customers or
suppliers, including possible bankruptcies, insolvencies or any
other inability to pay for our products or services or delays in
making timely payment; risks related to pandemics and other health
crises, the impact and potential extended duration of the current
supply/demand imbalance in the market for LEU; risks related to our
ability to sell the LEU we procure pursuant to our purchase
obligations under our supply agreements including those imposed
under the 1992 Russian Suspension Agreement as amended,
international trade legislation and other international trade
restrictions; risks related to existing or new trade barriers and
contract terms that limit our ability to procure LEU for, or
deliver LEU to customers; pricing trends and demand in the uranium
and enrichment markets and their impact on our profitability; risks
related to the movement and timing of customer orders; risks
related to our dependence on others, such as our transporters, for
deliveries of LEU including deliveries from TENEX, under our
commercial supply agreement with TENEX and deliveries under our
long-term commercial supply agreement with Orano Cycle ("Orano");
risks associated with our reliance on third-party suppliers to
provide essential products and services to us; risks related to the
fact that we face significant competition from major producers who
may be less cost sensitive or are wholly or partially government
owned; risks that our ability to compete in foreign markets may be
limited for various reasons; risks related to the fact that our
revenue is largely dependent on our largest customers; risks
related to our sales order book, including uncertainty concerning
customer actions under current contracts and in future contracting
due to market conditions and our lack of current production
capability; risks related to whether or when government funding or
demand for high-assay low-enriched uranium ("HALEU") for government
or commercial uses will materialize; risks and uncertainties
regarding funding for continuation and deployment of the American
Centrifuge technology; risks related to (i) our ability to perform
and absorb costs under our agreement with the U.S. Department of
Energy ("DOE") to deploy a cascade of centrifuges to demonstrate
production of HALEU for advanced reactors (the "HALEU Contract"),
(ii) to obtain contracts and funding to be able to continue
operations and (iii) our ability to obtain and/or perform under
other agreements; risks that (i) we may not obtain the full benefit
of the HALEU Contract and may not be able to operate the HALEU
enrichment facility to produce HALEU after the completion of the
existing HALEU Contract or (ii) the HALEU enrichment facility may
not be available to us as a future source of supply; risks related
to uncertainty regarding our ability to commercially deploy
competitive enrichment technology; risks related to the potential
for further demobilization or termination of our American
Centrifuge work; risks that we will not be able to timely complete
the work that we are obligated to perform; risks related to our
ability to perform fixed-price and cost-share contracts such as the
HALEU Contract, including the risk that costs could be higher than
expected; risks related to our significant long-term liabilities,
including material unfunded defined benefit pension plan
obligations and postretirement health and life benefit obligations;
risks relating to our 8.25% notes (the "8.25% Notes") maturing in
February 2027; the risks of revenue
and operating results fluctuating significantly from quarter to
quarter, and in some cases, year to year; risks related to the
impact of financial market conditions on our business, liquidity,
prospects, pension assets and insurance facilities; risks related
to the Company's capital concentration; risks related to the value
of our intangible assets related to the sales order book and
customer relationships; risks related to the limited trading
markets in our securities; risks related to decisions made by our
Class B stockholders regarding their investment in the Company
based upon factors that are unrelated to the Company's performance;
risks that a small number of holders of our Class A Common Stock,
par value $0.10 per share ("Class A
Common Stock") (whose interests may not be aligned with other
holders of our Class A Common Stock), may exert significant
influence over the direction of the Company; risks related to (i)
the use of our net operating losses ("NOLs") carryforwards and net
unrealized built-in losses ("NUBILs") to offset future taxable
income and the use of the Rights Agreement (as defined herein) to
prevent an "ownership change" as defined in Section 382 of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) our
ability to generate taxable income to utilize all or a portion of
the NOLs and NUBILs prior to the expiration thereof; failures or
security breaches of our information technology systems; risks
related to our ability to attract and retain key personnel; risks
related to the potential for the DOE to seek to terminate or
exercise its remedies under its agreements with the Company; risks
related to actions, including reviews, that may be taken by
the United States government, the
Russian government or other governments that could affect our
ability to perform under our contract obligations or the ability of
our sources of supply to perform under their contract obligations
to us; risks related to our ability to perform and receive timely
payment under agreements with the DOE or other government agencies,
including risks and uncertainties related to the ongoing funding by
the government and potential audits; risks related to changes or
termination of agreements with the U.S. government or other
counterparties; risks related to the competitive environment for
our products and services; risks related to changes in the nuclear
energy industry; risks related to the competitive bidding process
associated with obtaining contracts, including government
contracts; risks that we will be unable to obtain new business
opportunities or achieve market acceptance of our products and
services or that products or services provided by others will
render our products or services obsolete or noncompetitive; risks
related to potential strategic transactions that could be difficult
to implement, disrupt our business or change our business profile
significantly; risks related to the outcome of legal proceedings
and other contingencies (including lawsuits and government
investigations or audits); risks related to the impact of
government regulation and policies including by the DOE and the
U.S. Nuclear Regulatory Commission; risks of accidents during the
transportation, handling or processing of hazardous or radioactive
material that may pose a health risk to humans or animals, cause
property or environmental damage, or result in precautionary
evacuations; risks associated with claims and litigation arising
from past activities at sites we currently operate or past
activities at sites that we no longer operate, including the
Paducah, Kentucky, and
Portsmouth, Ohio, gaseous
diffusion plants; and other risks and uncertainties discussed in
this and our other filings with the Securities and Exchange
Commission ("SEC"), including under Part I, Item 1A - "Risk
Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2021 and under Part II, Item 1A - "Risk Factors"
of our Quarterly Report on Form 10-Q.
These factors may not constitute all factors that could cause
actual results to differ from those discussed in any
forward-looking statement. Accordingly, forward-looking statements
should not be relied upon as a predictor of actual results. Readers
are urged to carefully review and consider the various disclosures
made in this report and in our other filings with the SEC that
attempt to advise interested parties of the risks and factors that
may affect our business. We do not undertake to update our
forward-looking statements to reflect events or circumstances that
may arise after the date of this press release except as required
by law.
Contacts:
Investors: Dan Leistikow
LeistikowD@centrusenergy.com
Media: Lindsey Geisler
GeislerLR@centrusenergy.com
CENTRUS ENERGY CORP.
ADJUSTED NET
INCOME PER SHARE RECONCILIATION TABLE
The Company measures Net Income (Loss) and Net Income (Loss) per
Share both on a GAAP basis and on an adjusted basis to exclude
deemed dividends allocable to retired preferred stock shares
("Adjusted Net Income (Loss)" and "Adjusted Net Income (Loss) per
Share"). We believe Adjusted Net Income (Loss) and Adjusted Net
Income (Loss) per Share, which are non-GAAP financial measures,
provide investors with additional understanding of the Company's
financial performance as well as its strategic financial planning
analysis and period-to-period comparability. These metrics are
useful to investors because they reflect how management evaluates
the Company's ongoing operating performance from period-to-period
after removing certain transactions and activities that affect
comparability of the metrics and are not reflective of the
Company's core operations.
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
Numerator (in
millions):
|
|
|
|
Net
income (loss)
|
$
(0.4)
|
|
$
5.1
|
Less: Preferred stock dividends - undeclared and
cumulative
|
—
|
|
0.7
|
Less: Distributed earnings allocable to retired preferred
shares
|
—
|
|
6.6
|
Net loss allocable to common
stockholders
|
$
(0.4)
|
|
$
(2.2)
|
|
|
|
|
Plus: Distributed earnings allocable to retired preferred
shares
|
$
—
|
|
$
6.6
|
|
|
|
|
Adjusted net income (loss),
including distributed earnings allocable to retired preferred
shares
(Non-GAAP)
|
$
(0.4)
|
|
$
4.4
|
|
|
|
|
Denominator (in
thousands):
|
|
|
|
Average common shares outstanding - basic
|
14,547
|
|
12,818
|
Average common shares outstanding - diluted (a)
|
14,547
|
|
12,818
|
|
|
|
|
Net loss per share (in
dollars):
|
|
|
|
Basic
|
$
(0.03)
|
|
$
(0.17)
|
Diluted
|
$
(0.03)
|
|
$
(0.17)
|
|
|
|
|
Plus: Effect of
distributed earnings allocable to retired preferred shares, per
common share (in dollars):
|
|
|
|
Basic
|
$
—
|
|
$
0.51
|
Diluted
|
$
—
|
|
$
0.50
|
|
|
|
|
Adjusted Net Income
(Loss) per Share (Non-GAAP) (in dollars):
|
|
|
|
Basic
|
$
(0.03)
|
|
$
0.34
|
Diluted (a)
|
$
(0.03)
|
|
$
0.33
|
(a) For purposes of
calculating the Adjusted Net Income (Loss) per Share of $0.33, for
the three months ended March 31, 2021, average common shares
outstanding - diluted are 13,196,000 shares. No dilutive
effect is recognized in a period in which a net loss has occurred
and, thus, Net Loss per Share of $(0.17) for the three months ended
March 31, 2021, was calculated using 12,818,000 average common
shares outstanding.
|
CENTRUS
ENERGYCORP
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
(Unaudited; in millions, except
share and per share data)
|
|
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
Separative work units
|
$
12.8
|
|
$
38.1
|
Uranium
|
4.9
|
|
—
|
Technical solutions
|
17.6
|
|
17.5
|
Total revenue
|
35.3
|
|
55.6
|
Cost of
Sales:
|
|
|
|
Separative work units and uranium
|
14.8
|
|
25.4
|
Technical solutions
|
14.2
|
|
18.5
|
Total cost of sales
|
29.0
|
|
43.9
|
Gross profit
|
6.3
|
|
11.7
|
Advanced technology costs
|
1.1
|
|
0.5
|
Selling, general and administrative
|
7.5
|
|
8.2
|
Amortization of intangible assets
|
1.1
|
|
2.1
|
Operating income
(loss)
|
(3.4)
|
|
0.9
|
Nonoperating components of net periodic benefit
income
|
(3.3)
|
|
(4.3)
|
Income (loss) before
income taxes
|
(0.1)
|
|
5.2
|
Income tax expense
|
0.3
|
|
0.1
|
Net income (loss) and
comprehensive income (loss)
|
(0.4)
|
|
5.1
|
Preferred stock dividends - undeclared and
cumulative
|
—
|
|
0.7
|
Distributed earnings allocable to retired preferred
shares
|
—
|
|
6.6
|
Net loss allocable to
common stockholders
|
$
(0.4)
|
|
$
(2.2)
|
|
|
|
|
Net loss per
share:
|
|
|
|
Basic
|
$
(0.03)
|
|
$
(0.17)
|
Diluted
|
$
(0.03)
|
|
$
(0.17)
|
Average number of
common shares outstanding (in thousands):
|
|
|
|
Basic
|
14,547
|
|
12,818
|
Diluted
|
14,547
|
|
12,818
|
CENTRUS
ENERGYCORP
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited; in
millions)
|
|
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
OPERATING
|
|
|
|
Net income
(loss)
|
$
(0.4)
|
|
$
5.1
|
Adjustments to
reconcile net income (loss) to cash used in operating
activities:
|
|
|
|
Depreciation and amortization
|
1.3
|
|
2.2
|
Accrued loss on long-term contract
|
(0.5)
|
|
(2.0)
|
Deferred tax assets
|
0.3
|
|
—
|
Equity related compensation
|
0.5
|
|
—
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts receivable
|
16.6
|
|
14.2
|
Inventories
|
11.1
|
|
(18.7)
|
Inventories owed to customers
and suppliers
|
(8.1)
|
|
8.4
|
Accounts payable and other
liabilities
|
1.2
|
|
6.6
|
Payables under inventory
purchase agreements
|
(28.3)
|
|
(4.4)
|
Deferred revenue and advances
from customers, net of deferred costs
|
(0.3)
|
|
(12.5)
|
Pension and postretirement
benefit liabilities
|
(5.1)
|
|
(7.4)
|
Other, net
|
(0.9)
|
|
—
|
Cash used in operating
activities
|
(12.6)
|
|
(8.5)
|
|
|
|
|
INVESTING
|
|
|
|
Capital
expenditures
|
(0.1)
|
|
(0.4)
|
Cash used in investing
activities
|
(0.1)
|
|
(0.4)
|
|
|
|
|
FINANCING
|
|
|
|
Proceeds from the
issuance of common stock, net
|
—
|
|
23.2
|
Exercise of stock
options
|
0.2
|
|
0.2
|
Payment of interest
classified as debt
|
(3.1)
|
|
(3.1)
|
Other
|
(0.3)
|
|
(0.1)
|
Cash provided by (used
in) financing activities
|
(3.2)
|
|
20.2
|
|
|
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
(15.9)
|
|
11.3
|
Cash, cash equivalents
and restricted cash, beginning of period (Note 3)
|
196.8
|
|
157.9
|
Cash, cash equivalents
and restricted cash, end of period (Note 3)
|
$
180.9
|
|
$
169.2
|
|
|
|
|
Non-cash
activities:
|
|
|
|
Common stock and warrant issued in exchange for preferred
stock
|
$
—
|
|
$
7.5
|
Reclassification of stock-based compensation liability to
equity
|
$
10.6
|
|
$
7.5
|
Property, plant and equipment included in accounts payable
and accrued liabilities
|
$
0.2
|
|
$
0.1
|
Equity issuance costs included in accounts payable and
accrued liabilities
|
$
—
|
|
$
0.4
|
Shares withheld for employee taxes
|
$
1.9
|
|
$
—
|
CENTRUS ENERGY
CORP.
|
CONSOLIDATED BALANCE
SHEETS
|
(Unaudited; in
millions, except share and per share data)
|
|
|
March 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
168.5
|
|
$
193.8
|
Accounts receivable
|
12.5
|
|
29.1
|
Inventories
|
89.4
|
|
91.1
|
Deferred costs associated with deferred revenue
|
143.3
|
|
143.3
|
Other current assets
|
9.4
|
|
8.6
|
Total current assets
|
423.1
|
|
465.9
|
Property, plant and
equipment, net of accumulated depreciation of $3.1 million as of
March 31,
2022 and $3.0 million as of December 31,
2021
|
5.5
|
|
5.3
|
Deposits for financial
assurance
|
12.2
|
|
2.8
|
Intangible assets,
net
|
53.6
|
|
54.7
|
Deferred tax
assets
|
41.2
|
|
41.4
|
Other long-term
assets
|
2.0
|
|
2.3
|
Total assets
|
$
537.6
|
|
$
572.4
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and accrued liabilities
|
$
33.7
|
|
$
37.8
|
Payables under inventory purchase agreements
|
9.6
|
|
37.9
|
Inventories owed to customers and suppliers
|
0.3
|
|
8.4
|
Deferred revenue and advances from customers
|
302.8
|
|
303.1
|
Current debt
|
6.1
|
|
6.1
|
Total current
liabilities
|
352.5
|
|
393.3
|
Long-term
debt
|
98.8
|
|
101.8
|
Postretirement health
and life benefit obligations
|
113.5
|
|
114.9
|
Pension benefit
liabilities
|
19.6
|
|
23.1
|
Advances from
customers
|
45.1
|
|
45.1
|
Long-term inventory
loan
|
31.8
|
|
22.4
|
Other long-term
liabilities
|
9.3
|
|
13.7
|
Total
liabilities
|
670.6
|
|
714.3
|
Commitments and
contingencies
|
|
|
|
Stockholders'
deficit:
|
|
|
|
Preferred stock, par value $1.00 per share, 20,000,000 shares
authorized
|
|
|
|
Series A Participating
Cumulative Preferred Stock, none issued
|
—
|
|
—
|
Series B Senior Preferred
Stock, none issued
|
—
|
|
—
|
Class A Common Stock, par value $0.10 per share, 70,000,000
shares authorized, 13,757,384 and
13,649,933 shares
issued and outstanding as of March 31, 2022 and
December 31, 2021,
respectively
|
1.4
|
|
1.4
|
Class B Common Stock,
par value $0.10 per share, 30,000,000 shares authorized, 719,200
shares
issued and outstanding as of March 31,
2022 and December 31, 2021
|
0.1
|
|
0.1
|
Excess of capital over par value
|
150.1
|
|
140.7
|
Accumulated deficit
|
(285.0)
|
|
(284.6)
|
Accumulated other comprehensive income, net of tax
|
0.4
|
|
0.5
|
Total stockholders'
deficit
|
(133.0)
|
|
(141.9)
|
Total liabilities and
stockholders' deficit
|
$
537.6
|
|
$
572.4
|
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SOURCE Centrus Energy Corp.