- Net income of $7.2 million on
$66.9 million in revenue, compared to
net loss of $0.4 million on
$35.3 million in revenue in Q1
2022
- Gross profit of $23.0 million,
compared to $6.3 million in Q1
2022
- Consolidated cash balance of $188.8
million as of March 31,
2023
- Completed construction and initial testing of centrifuge
cascade under contract with the U.S. Department of Energy (DOE) to
demonstrate production of High-Assay, Low-Enriched Uranium
(HALEU)
BETHESDA, Md., May 8, 2023
/PRNewswire/ -- Centrus Energy Corp. (NYSE American: LEU)
("Centrus" or the "Company") today reported first quarter 2023
results. The Company reported net income of $7.2 million for the three months ended
March 31, 2023, compared to a net
loss of $0.4 million for the three
months ended March 31, 2022. The net
income per common share in the three months ended March 31, 2023 was $0.49 (basic) and $0.47 (diluted).
"We started off the year with a strong first quarter, generating
revenue of $66.9 million, gross
profit of $23.0 million, and
reporting a strong balance sheet with cash on hand of $188.8 million," said Centrus President and CEO
Daniel B. Poneman. "In addition, we
achieved a major milestone on the HALEU demonstration cascade this
quarter, having completed construction and initial testing. We look
forward to finishing the remaining requirements and beginning
production later this year as we stand up the first U.S.-owned,
U.S.-technology enrichment plant to begin production in 70
years."
Financial Results
Centrus generated total revenue of $66.9
million and $35.3 million in
the three months ended March 31, 2023
and 2022, respectively, an increase of $31.6
million.
Revenue from the LEU segment was $58.8
million and $17.7 million in
the three months ended March 31, 2023
and 2022, respectively, an increase of $41.1
million. The increase is due to an increase in the volume of
SWU sold and an increase in the average price of SWU sold.
Revenue from the Technical Solutions segment was $8.1 million and $17.6
million in the three months ended March 31, 2023 and 2022, respectively, a decrease
of $9.5 million. The decrease was
primarily related to a $11.6 million
decrease in revenue generated by the HALEU Demonstration Contract,
as well as a $5.6 million decrease
across other contracts, partially offset by $7.7 million in revenue generated by the HALEU
Operation Contract.
Cost of sales for the LEU segment was $34.9 million and $14.8
million in the three months ended March 31, 2023 and 2022, respectively, an
increase of $20.1 million. The
increase is primarily due to an increase in the volume of SWU
sold.
Cost of sales for the Technical Solutions segment was
$9.0 million and $14.2 million in the three months ended
March 31, 2023 and 2022,
respectively, a decrease of $5.2
million. The decrease of $5.2
million for the three months ended March 31, 2023, is related to a reduction in
costs of approximately $7.3 million
associated with the HALEU Demonstration Contract and $6.1 million associated with other contracts,
partially offset by $8.2 million of
costs incurred for the HALEU Operation Contract.
Gross profit for the Company was $23.0
million and $6.3 million in
the three months ended March 31, 2023
and 2022, respectively.
HALEU Update
Centrus announced in early February that it had completed
construction and initial testing of a cascade of advanced uranium
enrichment centrifuges as well as most of the associated support
systems. This milestone puts the Company on track to begin
demonstrating first-of-a-kind production of HALEU at its facility
in Piketon, Ohio, by the end of
2023, after completing remaining support systems and obtaining
final approval from the Nuclear Regulatory Commission. This will be
the first new U.S.-owned, U.S.-technology enrichment plant to begin
production in 70 years.
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,
as amended, and the Private Securities Litigation Reform Act of
1995. In this context, forward-looking statements 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 on information
available to us as of the date of this news release and represent
management's current views and assumptions. Forward-looking
statements are not guarantees of future performance, events or
results and involve known and unknown risks, uncertainties and
other factors, which may be beyond our control.
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 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 by either the U.S. or
foreign governments, organizations (including the United Nations,
the European Union or other international organizations), entities
or persons, that could directly or indirectly impact our ability to
obtain, deliver, 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, among other reasons, TENEX is
unable to receive payments, or to receive the return of natural
uranium, as a result of any government, international or corporate
actions or directions or other reasons; 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
and operate a cascade of centrifuges to demonstrate production of
HALEU for advanced reactors (the "HALEU Operation Contract"), (ii)
our ability 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 Operation Contract and may not be able or allowed to
operate the HALEU enrichment facility to produce HALEU after the
completion of the HALEU Operation Contract or (ii) the HALEU
enrichment facility may not be available to us as a future source
of supply; 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 a subsidiary
of Orano Cycle ("Orano") or other suppliers; 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, endemics, and other
health crises; risks related to the impact and potential extended
duration of a 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 and sanctions or
limitations on imports of such LEU, 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;
risks related to 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
associated with our reliance on third-party suppliers and service
providers 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 uncertainty
regarding our ability to commercially deploy a competitive
enrichment technology; risks related to the potential for
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 Operation
Contract, including the risk that costs that we must bear 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 related to our 8.25% Notes maturing in
February 2027; 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
(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 and may be motivated by interests that are not
aligned with the Company's other Class A stockholders; 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 prior to the expiration thereof and
NUBILs; risks related to failures or security breaches of our
information technology systems; risks related to our ability to
attract and retain key personnel; risks related to actions,
including reviews, that may be taken by the U.S. Government, the
Russian government, or other governments that could affect our
ability to perform under our contractual obligations or the ability
of our sources of supply to perform under their contractual
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, or the exercise of contract
remedies by such 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 toxic 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 SEC.
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 news release and in our other filings with the SEC,
including our Annual Report on Form 10-K for the year ended
December 31, 2022, under Part II, Item 1A - "Risk Factors" in
our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023, and 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 news release, except as required
by law.
Contacts:
Investors: Dan Leistikow at
LeistikowD@centrusenergy.com
Media: Lindsey Geisler at
GeislerLR@centrusenergy.com
CENTRUS ENERGY
CORP
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited; in
millions, except share and per share data)
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
Separative work
units
|
$
58.8
|
|
$
12.8
|
Uranium
|
—
|
|
4.9
|
Technical
solutions
|
8.1
|
|
17.6
|
Total
revenue
|
66.9
|
|
35.3
|
Cost of
Sales:
|
|
|
|
Separative work units
and uranium
|
34.9
|
|
14.8
|
Technical
solutions
|
9.0
|
|
14.2
|
Total cost of
sales
|
43.9
|
|
29.0
|
Gross profit
|
23.0
|
|
6.3
|
Advanced technology
costs
|
3.4
|
|
1.1
|
Selling, general and
administrative
|
10.3
|
|
7.5
|
Amortization of
intangible assets
|
1.1
|
|
1.1
|
Special charges for
workforce reductions
|
(0.1)
|
|
—
|
Operating income
(loss)
|
8.3
|
|
(3.4)
|
Nonoperating
components of net periodic benefit loss (income)
|
0.3
|
|
(3.3)
|
Interest
expense
|
0.3
|
|
—
|
Investment
income
|
(1.9)
|
|
—
|
Income (loss) before
income taxes
|
9.6
|
|
(0.1)
|
Income tax
expense
|
2.4
|
|
0.3
|
Net income (loss) and
comprehensive income (loss)
|
7.2
|
|
(0.4)
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
0.49
|
|
$
(0.03)
|
Diluted
|
$
0.47
|
|
$
(0.03)
|
Average number of
common shares outstanding (in thousands):
|
|
|
|
Basic
|
14,841
|
|
14,547
|
Diluted
|
15,241
|
|
14,547
|
CENTRUS ENERGY
CORP
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited; in
millions)
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
OPERATING
|
|
|
|
Net income
(loss)
|
$
7.2
|
|
$
(0.4)
|
Adjustments to
reconcile net income (loss) to cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
1.3
|
|
1.3
|
Accrued loss on
long-term contract
|
(5.6)
|
|
(0.5)
|
Deferred tax
assets
|
2.2
|
|
0.3
|
Equity related
compensation
|
1.2
|
|
0.5
|
Revaluation of
inventory borrowing
|
2.1
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
5.3
|
|
16.6
|
Inventories
|
22.3
|
|
11.1
|
Inventories owed to
customers and suppliers
|
(43.6)
|
|
(8.1)
|
Other current
assets
|
15.1
|
|
(0.8)
|
Accounts payable and
other liabilities
|
(4.2)
|
|
1.2
|
Payables under
inventory purchase agreements
|
(11.1)
|
|
(28.3)
|
Deferred revenue and
advances from customers, net of deferred costs
|
0.1
|
|
(0.3)
|
Pension and
postretirement benefit liabilities
|
(0.7)
|
|
(5.1)
|
Other, net
|
(1.3)
|
|
(0.1)
|
Cash used in operating
activities
|
(9.7)
|
|
(12.6)
|
|
|
|
|
INVESTING
|
|
|
|
Capital
expenditures
|
(0.3)
|
|
(0.1)
|
Cash used in investing
activities
|
(0.3)
|
|
(0.1)
|
|
|
|
|
FINANCING
|
|
|
|
Proceeds from the
issuance of common stock, net
|
22.0
|
|
—
|
Exercise of stock
options
|
—
|
|
0.2
|
Payment of interest
classified as debt
|
(3.1)
|
|
(3.1)
|
Other
|
—
|
|
(0.3)
|
Cash provided by (used
in) financing activities
|
18.9
|
|
(3.2)
|
|
|
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
8.9
|
|
(15.9)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
212.4
|
|
196.8
|
Cash, cash equivalents
and restricted cash, end of period
|
$
221.3
|
|
$
180.9
|
|
|
|
|
Non-cash
activities:
|
|
|
|
Reclassification of
stock-based compensation liability to equity
|
$
—
|
|
$
10.6
|
Adjustment of right to
use lease assets from lease modification
|
$
4.2
|
|
$
—
|
Property, plant and
equipment included in accounts payable and accrued
liabilities
|
$
—
|
|
$
0.2
|
Shares withheld for
employee taxes
|
$
1.9
|
|
$
1.9
|
ATM proceeds included
in accounts receivable
|
$
1.2
|
|
$
—
|
CENTRUS ENERGY
CORP
CONSOLIDATED BALANCE
SHEETS
(Unaudited; in
millions, except share and per share data)
|
|
March
31,
2023
|
|
December
31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
188.8
|
|
$
179.9
|
Accounts
receivable
|
34.1
|
|
38.1
|
Inventories
|
209.4
|
|
209.2
|
Deferred costs
associated with deferred revenue
|
135.7
|
|
135.7
|
Other current
assets
|
9.0
|
|
24.2
|
Total current
assets
|
577.0
|
|
587.1
|
Property, plant and
equipment, net of accumulated depreciation of $3.8 million as of
March 31,
2023 and $3.6 million as of December 31, 2022
|
5.4
|
|
5.5
|
Deposits for financial
assurance
|
32.3
|
|
32.3
|
Intangible assets,
net
|
44.6
|
|
45.7
|
Deferred tax
assets
|
24.6
|
|
26.8
|
Other long-term
assets
|
5.1
|
|
8.1
|
Total assets
|
$
689.0
|
|
$
705.5
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
55.4
|
|
$
65.5
|
Payables under
inventory purchase agreements
|
32.6
|
|
43.6
|
Inventories owed to
customers and suppliers
|
17.2
|
|
60.8
|
Deferred revenue and
advances from customers
|
273.3
|
|
273.2
|
Current
debt
|
6.1
|
|
6.1
|
Total current
liabilities
|
384.6
|
|
449.2
|
Long-term
debt
|
92.6
|
|
95.7
|
Postretirement health
and life benefit obligations
|
84.1
|
|
84.5
|
Pension benefit
liabilities
|
43.4
|
|
43.6
|
Advances from
customers
|
46.2
|
|
46.2
|
Long-term inventory
loans
|
73.3
|
|
48.7
|
Other long-term
liabilities
|
9.3
|
|
11.7
|
Total
liabilities
|
733.5
|
|
779.6
|
|
|
|
|
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,
14,746,643
and 13,919,646 shares issued and outstanding as of March 31,
2023 and December 31, 2022,
respectively
|
1.5
|
|
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, 2023 and December 31,
2022
|
0.1
|
|
0.1
|
Excess of capital over
par value
|
180.5
|
|
158.1
|
Accumulated
deficit
|
(226.7)
|
|
(233.9)
|
Accumulated other
comprehensive income
|
0.1
|
|
0.2
|
Total stockholders'
deficit
|
(44.5)
|
|
(74.1)
|
Total liabilities and
stockholders' deficit
|
$
689.0
|
|
$
705.5
|
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SOURCE Centrus Energy Corp.