Centrus Energy (LEU) 9 May 232023 Q1 Earnings call transcript

Greetings and welcome to the Centrus Energy First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Dan Leistikow, VP Corporate Communications. may you Dan, you, begin. Thank

Today thank Good Kevin Officer; Today's of Philip for Poneman, Harrill, XXst. us. Strawbridge, our Officer; and all will morning XXXX and cover and Executive March quarter Controller and call first the joining the Chief Dan Officer. Financial you results Chief have we Chief ended President for Accounting

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

We of expect to file our later report for the XXXX first Form quarter on today. XX-Q

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

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

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

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

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

you call turn over the your to I'll Poneman. And now Thank Dan for participation.

in for of We revenue another $XX.X today. call healthy you and the year in million report with Dan cash. ended with to and net Centrus, thank I'm off the you, on Thank $XXX.X quarter million. income kicking everyone and the $X.X profitable quarter million pleased to

structure our our remind our due that lumpy of contracts. always to are and investors revenue margins the We

laying are course one Nevertheless, growth. of matters what our the bottom-line start both but over the happens in we most off a strong So, quarter, to in future of what foundation year. is a and for terms not any numbers

teams In systems. They I contract with continued cascade the completed Energy. been along technical execute our am incredibly February, to have support proud of the Ohio on centrifuges of of US we superbly in have of our construction demonstration building and Piketon, most we with Department in of the Tennessee. Ohio,

recently we're Review, Regulatory Operational now Nuclear forward Having written completed Readiness licensed material. receiving possess approval from to to looking formal fizzle the our Commission

and activities finish remain The next production be before and systems some final the report end of cascade I'm operations that this support online. year. will steps we testing begin track to to bring remaining complete the to on the we construction by of pleased

as XX history to technology the new enrichment first production years. make will plant US-owned This in begin US

website done things encourage the progress so thus haven't the you good and of site to our If sign of visit It impressive you photos far read already, we've made our to a come. to to take shareholder letter look I to an at about a is cascade. and learn

in assay facility from by Regulatory produce the uranium to United Commission low only the The the high only Russia. States which Piketon HALEU, plant is available currently or licensed is enriched Nuclear

needs. of supply a commercial world's help for the we domestic climate to HALEU facilitate chain the fuel a HALEU, and meet establishing By generation can deployment reactors new energy of clean

high will energy necessary. to there are designed addition density HALEU-fueled microreactor number under which Westinghouse, HALEU's others USNC, reactors of Oklo, companies like small development, modular be and for many a In the by Radiant,

well up enriched requirements, Even LEU the is commercial, range production as the the the as for of HALEU security that government, under to with meet support contract HALEU Energy to mission national goal fleet. and as our scale existing can requirements we the facility of full begin of reactor the to Department ultimate power uranium, Department's including

facility the with and it thousands additional footprint for large room is centrifuges roughly already of The the has scale Pentagon, as production. same Piketon licensed for

year, our cascade the into Department the HALEU covers of with department. US of Phase contract Later delivering of this Energy, initial which expect X the complete to operation we an kilograms to bringing and XX

Those the at full Phase up subject X, to phases Department's per In production the X options sole the for These Department additional discretion year of of will year. involve Phase to at years a a of two the rate of XXX has kilograms years contract. production. are and availability appropriations. represent nine base

in investment particularly an the public-private a industry and federal by strong will Expanding government-owned dominated require that's partnership, foreign corporations. plant significant

leaders recognition technology growing as enrichment non-governmental is sides organizations, the about restoring security in There government invest capacity. America's academia, aisle uranium missions. national the labor, of both US enrichment in in on well to among organized many domestic a of of industry, Department need number for in Energy quarters a needs The as capability

energy security not non-Russian friends the reactors. within United is our there's world's the reinforced States allies. enough reality also among and has XX% The Russia that in today the has world enrichment the and Ukraine fuel in and capacity concerns war capacity of The world's to

enriched in. alone." Over that said is in today when that supply, also to and comes That nuclear logic world needs Winston this "Safety and Churchill uranium The more ago, is certainty more quote, fits only oil but lie century suppliers, variety uranium and enriched it applies not where Centrus in a a energy. variety equally and

added last year. million first Spending the Bill for address HALEU, end in the another HALEU the at of to critical As establish million signed need part provided $XXX Reduction Inflation $XXX Omnibus chain. domestic as the XXXX to Act a help of a step supply Congress

of Sought Department for anticipation October, proposals. a notice eventual in Sources quantities notice through an of significant purchase program HALEU request XXXX. Energy outlined of a In the issued Sources The to Sought robust

would Of implement fully be program. appropriations that course, to additional required

Reduction requirements, to country hope fact can a is investments to Given the America's HALEU that strong global needs administration our future make given and enrichment nuclear security the the leadership to stands ready and Inflation that the included Act. capability our payment how Centrus Congress and are together important energy national come to our building long-term that and in we required on that new part. was in do the meet down

facility path is HALEU and available to licensed Our we the believe offer large-scale already fastest production. we

Centrus nonproliferation national enrichment the long-standing use is also and And because only US deployment-ready has of uranium. technology for US can enrichment, that security any prohibit technology requirements to foreign national a policy the national security. technology required it US binding agreements for enriched comes origin meet when security

numbers. some now over call will the I Philip, walk of who that, the with to will turn you And through

Dan. everyone. Thank Good morning you,

considerable The there XX% our example, are at and in contracts of majority revenue our LEU from margins profit Last and QX. year, discussed, variability gross is for multiyear contracts. QX of vast in As our came quarter-to-quarter. more than

customers quarterly Our revenue a basis. booked delivery, a quarter, take Centrus, not to cost to have year often purchase for What varies not the and that the performance, choose on is matters of year. performance. on from which which the and in quarterly quarter of obligation annual basis, They an but annual we sales course,

million million, the very $XX.X for generated $XX.X profit cost segment by utilities, resulting of sale a Overall, $XX.X levels $XX.X the The of mentioned, Dan That said, quarter. our for gross million. had revenue million over to as a involving total was to in million of XXXX increased in strong enrichment quarter. segment. we the revenue first $XX.X the In we sales LEU

contract million of In with well other production for HALEU against Solutions as segment, $XXX,XXX. cost contract and Energy $X sector Technical variety quarter for as of revenue which loss our our in build a Centrus $X.X public of customers, private to work of million generated includes gross Department sales the and we a the of demonstrate for

financial overall of cash position includes which million assurance. an with going strong financial forward balance restricted $XXX.X of a in million, cash for $XX.X We're

through order of at XX, end the is book As decade. billion our March of the valued LEU $X

that for does Technical LEU the Solutions not segment. Now, is just include our segment total and

of last solicitation. which we it excludes, with under example, Department the contract year HALEU So, Energy, for won competitive the operations

Dan. to back With that, to I'm going over turn it

Thank you, Philip.

to word we what a say just questions, trend we about to believe Before toward demand your a is fuels. get like clear nuclear growing for I'd

has happened look in last the months. what Just at few

approved California reality to Canyon meeting that nuclear Commission our the plant, On essential is plans targets. decarbonization of power February recognizing premature nuclear the the power avert Diablo the shutdown to XXth, Energy

to On Coast. Gulf March Xst, four HALEU partnership of Chemical Xe-XXX X-energy fueled the deploy Dow's reactors announced one at Dow with a along new facilities industrial

$X On March Utilities awards fleet for large Xnd, Tax of invited Credit Nuclear to preserving US Civilian the the billion round America's Department apply program at next the aimed under existing reactors. of of Energy

new tax large March nuclear refundable Canada credit the a both proposed On government plants, construction can for XXth, XX% small. and support new of investment clean energy that of

X the build of they natrium to in TerraPower to Energy. one XXXX. to plan in That XXst, On the with help announced $X plans March from PacifiCorp addition by Wyoming HALEU-fueled reactors of build with US commitment Department XXXX billion additional the a by

new reactor nearing in Xst, XX States April the the A large past built first On began that Georgia in at a It's is in United well. producing electricity. site reactor new new reactor years. completion the second as

reactors next level for years. Gallup build over the integrated three nuclear XXth, XX resource filed public Dominion week, modular to showing decade. highest And April released plan poll small at between and in On Energy last outlining results energy just Virginia the options support new its a six in

meeting that nuclear committed a Duke small Duke reactors, Energy's of told pursuit through and including CEO, with shareholder to modular is the energy Lynn a its supporting TerraPower. development of Good, continuing partnership

announced program of to APXXX. reactors. new Westinghouse And a small unveiled the reactor plans for Prime the three-year Kishida, modular invest a called Japan, sodium in fast in Minister XXX-megawatt development

market critical United enable strong of energy, Centrus to a and chapter the production. to the points All States nuclear has next starting here in with and world. HALEU a around nuclear the growing mission this

but not our HALEU stars. to take By also it only the the needs on can earth, way, can here us meet

the and to new this XXXX. take by humans the NASA fact, opportunity future that a missions test look DARPA engine to will for HALEU-fueled to produce earlier thermal We forward Mars announced year to nuclear beyond. plans fuel and In

supporting investors all And are I want important that, questions. with of Finally, who we'll thank this operator, to work. your in us take our

Thank you.

be session. now question-and-answer [Operator a conducting will We Instructions]

Our Capital with question. your from first proceed line Markets. Street of Lake Brown Please is with question the Rob

and the morning all on Good congratulations progress.

Rob. morning Good

morning Rob. Good

of that decisions sort you? to But that for then in and support next you When I know do extend that in of some of this and HALEU the potential for you production. what see after, steps that some steps timeline? have of how next support the made and looks the place terms get contracts do as IRA the are

Well, good to great talk and to question, you. Rob,

know come is talking that it we the to milestone going it's of out. They've day will the proposals this that's very for process important million the on a what step. US and We Department been been the in up. the don't of to being be funding next So, have request That exactly $XXX phase now Energy working at important through build translated effectively about. next in

From kinds a can to build end up raise those final capital to a decision months cascade the of investments next to phase, investment XX building of we about another to necessary and within make the decision.

so that's capital you of tell invest as takes, that a government talking safe the in. enrichment is And private is about. to years. we're And bet facilities will timeline a that Building critical that here is few that know, path sort getting item Rob, the this matter contribution a

does far? about think this sort the similar then talked Or DOE it you. still Does Thank think expect that to determined investment great you've contracting? before, That's that the what projects of I be of to you as do you with kind color. about thus Okay. how you've be And but done investment, to work?

that's don't out skin about lot to is what because to the talked to the know, One proposals. that's number government of to demand way come fund There's investments. request ways offtake exactly the these we're power really of We a Rob, use see of cat. been for a expecting

the models program. like There been models share in example, for are ARDP cost used, other that have

that see but we to won't really of just rollout. going anybody, what structure so it's be as until And the RFP we're we know curious

I'll it right. turn All over. you. Thank

Thank you.

Joseph MKM. ROTH with with Our the comes question. next line proceed of your Reagor question from Please

guys. questions the Hey and good start Thanks taking on congrats a to for year. the

you, Thank Joe.

Joe. Thanks

a enriched House following and unenriched of is thing. whether you Senate contract overall the seen or any of changes big in were proposed? guys that kind it just market, So, Have uranium bills for picture some the

XXXX, or Ukraine calendar I legislation, based really Well, overall a and the some the in produced are rise legislative see range though, market of they don't terms to prices has pretty trade the change, at what actually August have seen at in in a invasion. published to been of invasion, this up bottomed indicators but $XX rising. around introduction had anxiety on got enrichment the invasion, predates the the of out we the Since $XXX substantial They up press. time the of in the the that

has in spawned think most was, concern legislation source particular I internalized to to that Ukraine has, driven my I the as Russia, key and important so such installed a mentioned supply trends but of of that, been an which And change by rather not of and globally production think, the capacity broader in secular the has being sense, that that that concern driven remarks, in are with, think, I lot. enrichment XX% the I the introduced, market the

a through into driven spike conversion. gas, also got other seen And centrifuge And the obviously, enrichment can't this, conversion related same there's the supply to increase on all septic since you that you have in powder as that price the machine, powder north demand uranium obviously, market then aspect to a or a chain the concerns turn since space, have well. tight the in conversion the shelf you've

to is Metropolis, expectation ConverDyn that, see. of should plant Illinois, another is which Now, trend that going but that's restart some ease that there their we

that a bill of suggested now? on you kind just or at least utilities look signing be focused guys guys with contracts, then to And XXXX would to in going for more follow-up. beyond near-term Okay. Senate slight was the contracts that at you date Are continue

are to the And always future. to ways Well to here. efforts looking from for in shift a glide chime can We path. Philip, in you we which we're always our may term looking short-term longer -- want and

if brokerage we to making measured succeed from segue to forward glide material very brokering of We add that, transition a the are manage operating one between market. material Philip? to we're terms purely now therefore contracts getting as we a future can in into operation we that own and chain the has existing our will the seeing focused well extend supply now our supply adding supply decades. on in And to to if our from the own the do to sales path in that

mean, supply near-term to first again, I we'd out Joe. Yes, both that all, the only opportunities. apply long-term one of legislation, of on would and and draft way And our contracts. in focus future

so. supply we've have other as We contracts before, mentioned

enough. I'll Okay, fair turn it over.

Instructions] Thank you. [Operator

turn at be to the time. back appear for further There this like to floor management to no remarks. over questions I'd closing

Thank conclude of you, operator. This will QX our XXXX. investor call for

our investors. I always, thank speaking want listeners you again forward look As to online you and quarter. our We to next extend to a with

teleconference. This concludes today's

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