Centrus Energy (LEU) 7 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. My name is John, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Centrus Energy Second Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like the now Dan over Leistikow. to would call turn to I go Please ahead.

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

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

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

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

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

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

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

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

sheet thank for achieved positioned to another today. ourselves long-term which delivered Centrus you strong margins, balance and and growth. for and revenue, everyone to you, call pleased quarter on report profit our strong I in we strengthened productive positive am Thank the Dan,

folks to is results we encourage to focus quarter one opposed timing the annual numbers from deliveries, vary customer which that quarter always, the substantially why As as of to listeners our any remind we to due quarter. on

and revenue customer $XX.X our by income in greater sheet million a our remaining the We cash for depth quarter, of pension expanded this our derisking number reported by LEU discuss We eliminating strengthening net while in million $XXX to and deliveries in balance had in balance majority the shortly. $XXX driven business segment. Kevin our million obligations. large will of

we X using October, by operations in history the uranium company technology U.S. made U.S. enrichment Last years. becoming to commence enrichment first plant

The to HALEU produce the produce reactors the low-enriched demonstration or next-generation the to reactors. quantity designs. fuel continuing supporting fuel urgently are high-assay, modest we uranium, of in of Energy needed foundation We which new can Department for HALEU, is and is today

The HALEU accommodate is facility, potential than centrifuges. production to Our our is XX,XXX current larger. designed a cascade of which Ohio corner small exponentially occupies more

clear: to enriched uranium at but meet goal of centrifuge that commercial capacity range for so including HALEU Our expand requirements fleet our commercial for we reactors. can also of our the existing national security is American and only the Ohio low-enriched plant not uranium, in full

is only exclusively own missions including has use which security that enterprises, given provide U.S. its partnership technology, domestic critical. technology government require enrichment public-private can national is requirements state-owned we a technology fact enriched U.S.-origin by the for enrichment the why investment that of uranium, through the dominated here today. is so justified support market enrichment Government uranium especially government global The for is

in our new capacity. commercial purchase build LEU secure months plans. customers the a past as investment, U.S. few will of scaled enrichment alone, the government, announced us in support seen enrichment quarter, confidence in well on from contingent to financing our we strategic require the build-out strong signals the have give we to of While million Last that ability necessary the new commitments facility as $XXX

and RFPs addition, Energy has and HALEU now American LEU RFP, We this Department of proposals in for In production year, as backed part are congressional and by our the to issued for March than month. is were are of submitted which in earlier Inflation jump-start our approved LEU billion the government RFPs that HALEU. we designed $X.X funding more appropriations next of Act both Reduction developing bipartisan the proposals XXXX. bill due in These XXXX the

largest decades. represent production together, domestic the Taken investment fuel in in they nuclear federal

to granted. competitive are no have guarantees. take solicitations. These team for I told There are my nothing

is capabilities bring job proposals competitive value together government. put the to to that our Our highlight the best for

to make. We case have a strong

operations. already a in proven that have technology We is

X licensed for license have production and X currently the of U.S. sites HALEU production. one LEU for We only only

We American-owned only company. are enrichment the

an We fully our utilize American will manufacture supply the U.S. rely are centrifuges that the chain. We only in and on technology

Our security technology can is under is That nonproliferation important used technology support only national missions. crucially because, U.S.-origin to U.S.-origin. agreements, long-standing be a

and enrichment play security we workers. energy transition short, from national will creating made-in-America truly to capability successful, role of depending pivotal high-tech for to uranium jobs In a while are our an uniquely a enabling away American strengthen positioned are States we enrichment. will family-supporting, foreign we United domestic deliver in supplies solution, on security our which If restoring all-in-one, the

from law uranium XXXX. ban August of take to there's imports And President which to May waste. enriched XX, set XXXX, into on time no In Russia, the is on the effect signed the

enable to However, and our some that XXXX. transition clear own is lawmakers waivers transition through Centrus years has to so waivers next Department for to us take that Energy authorizes reality issue production. going we need our to supply few recognize complete the been the as the we the the back contracts of to time, law Russian

Energy in our Americans been with the decision day ensure to importations our to customers while are uninterrupted in and XXXX. Last of granted our supply of every have U.S. fuel partners necessary communications an also that government on that and reactors millions We consistent waivers the rely of Centrus on XXXX waiver power. deferring a Department for for month, XXXX covering a XXXX

this shared American the understanding a that years harm reflects We are and outcome, would between process pleased industry which customers. several to disruption government online come won't new with our near-term capacity the the OE's that and and approach for avoids

have also imports fuel United we term, request covering the that international to and waiver not customers. their have imports into in have And customers we enriched States requested plan covering in waiver and longer yet that the We for uranium reexported. to a fabricated committed XXXX XXXX our

for for U.S. is reality their to are why X/X next waivers Russian-origin accounts more so and during domestic these capacity The needs relied that of of on last but Centrus, the and for enrichment the country, year. today, XX% over the than Russia years. world's up important period, the for capacity enrichment utilities not enrichment we just work few industry transition scale this as That's

do great We're together partnership as government uranium that building one business, America and Working lead enrichment domestic between them. Centrus of to things. capacity effort. can our stands in ready

to things Kevin. going turn I'm to over that, With

Amir. you, everyone. Good morning, Thank

the quarter in results our internal for projections orders financial customer Our remain with based on deliveries. line and

anticipated second quarter did more a quarters. in XXXX in albeit not those future quarter delivered second margin the replicate The XX% quantities current priced as reflected of that but at quarter were deliveries year. due than the lower are than XXXX in of favorably to of slightly SWU This fuel prior several needs increase their in was the

future quarterly of existing fleet own pursuit for LEU domestic on continue of generate growth reactor is of generation and the to and commercial production imperative positive flows, as for the which next reactors. We cash our our HALEU we focus

revenue million As quarter an in the and XXXX, increase Amir generated in second income. revenue $XX.X income, we for million net noted of $XX.X million net earlier, and in of in $XXX million $XX.X

as of million reflecting average revenue, of Our LEU business SWU well compared both increases $XX of in generated sold increase price sold. same SWU million $XXX.X quarter the as the to an in volume in the XXXX,

volume sales increase compared increased to million quarter from unit we average as XXXX, an profit the to $XX the in increase We of LEU million $XX.X with reflecting the $XXX.X quarter LEU in XXXX. cost million Our well in an as of ended of in costs quarter million again gross $XX.X second in XXXX sold. in of the second sales

a generated also million improvement profit, in prior was the million was $XX.X second million an $X.X $XX profit million, On gross $X.X in increase basis, gross versus Our Solutions XXXX. which year. consolidated an Technical the quarter from of segment of our

for and prior reported XXXX, XXXX increase generated an of $X.X of revenue, million quarter sales, quarter cost to million second million the second of Solutions in in of $XX.X the $XX.X of $X.X the million year. an Technical compared compared increase was to which

HALEU the Our under a a operation contracts model basis X year-over-year results cost-share fee the model a from under to incentive Phase of cost-plus transition X. Phase on reflected

second gross margin year-to-date, quarter raise and our million, cash ending the we related balance $XX.X expenses. of million ATM and the proceeds In restricted $XXX restricted and of balance raised offering cash or the of million of under second cash. cash million to $XXX.X These to million contributed in a continued net our for quarter of $XX.X and funds a total $XX.X generated of net XXXX,

plan of million the strong fourth for agreement reduction position resulted our obligations to the balance million, These pension transfer future. the of This and by These will piece quarter of remeasurement million X,XXX obligations with administration covers XX% a our When benefit contract $XX.X a current company's purchase than and domestic $XXX the part responsibilities into previous and obligation to execution transactions transfer initiatives in entered prior operations. a second the to Our to with quarter in represents liabilities. we company's million of The continues strategic of the X,XXX of balance annuitization, the XXXX, in cash $XXX reduced year. obligations approximately as multifaceted annuity strategic X were investment which beneficiaries, have in May our of insurer. a vision approximately the to derisked XXXX expand to and combined strategy of transactions been have approximately an of $XXX contractual On statement facilitate recognition our sheet for plan XX, pension enrichment group both approximately beneficiaries. a annuitization significantly more capacity. gain our sheet payments an future strengthen in

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

the political be final what November I'd point political Kevin. like will few over happen knows the run-up Thanks, months, one in to year. make, the been U.S. last next to No election. what obviously, the has will landscape in or tumultuous the One cycle

is and the consensus for nuclear particular, in nuclear nuclear and advance about the broad is for fuel need to in American in news both Centrus, industry parties there energy good and that The a production. leadership reclaim

was fuel under X Our next-generation program, the the reactors Biden of cascade the deployment administration funding was innovative which administration ], launched The Trump advanced and infusion is the work advancing HALEU by Biden. the support infrastructure designs major also funding signed the under and bipartisan [ then congressional HALEU administration. reactor X on a other bipartisan then Trump extended law launched of reactor and during received demonstration President by with

a having worked the appeals and agreement the in And ideological November, needs as I XXX working in something look well a of candidates leader Congress a this U.S. energy in win in a mentioned production, affordable, that fuel a We and capabilities spectrum. that including key with production. America's of Republicans expect policymakers Washington. nuclear global nation's nuclear days can across investment restore source to people Democrats a earlier, as to in to restoring support both enact domestic a Regardless multibillion-dollar LEU parties meet will remain and year as together day, end, ahead hours X XX to reliable, nuclear energy status parties that uranium for days years point in forward our HALEU. emissions-free week, is spring, bipartisan we which fuel In as in enrichment of

by None your of me us Let this have close of thanking this be who on support. possible investors call. joined would our all today without

in faith placed are committed and and you results the expect delivering us to deserve. living the to We up you have

We time. to are this happy questions Operator? take at

moment now to roster. and you. the gentlemen, Thank As to a have Q&A for pause will Ladies we'll a our question-and-answer Instructions] begin compile we reminder, session. [Operator

Ms. joins Centrus wealth Board working of forward We She am While knowledge for yesterday. period security them Directors I member, the success. for future who and Rothrock, our cyber Her in share experience arena, to among appointed our questions, nuclear exciting the meeting. Stephanie will elected for of security and Board O'Sullivan we invaluable industry during to and the shareholder company. Board to Ray the our was national others, new happy that with during look June our this be wait

you. Thank

first from Your comes the Rob question Markets. from Capital Lake of Brown line Street

the talked sort on still of or going you I play the could -- plans out? need I a the wanted you HALEU's more be bit ] they LEU the just an lines they is And a guess? talk interrelated, timing, alluded to been submitted sense independent But about submitted. about. time the RFPs how are to give [ little What's us that or of time to and those are effort? and

All right.

So let's timing about talk about first. your question

submitted we information exactly but September. know, are the third LEU when due from little you be Energy how as now and from definitely of X a actually RFPs, So of know. Department those the can guess RFP month very And and there's awarded. We the in going to is don't speculate, we and

So and to but are we part critically as the as view we question, those always important us your I those critical, I'm hope being obviously, answering well. -- LEU as stated,

we government a up ready government, And the awards public-private we -- said, we kind go. the always of of As is require project will the timing although really are to to partnership. this a

the the again, I where -- on see you sounds or And deferred work, that Is think years. you waivers then at and a you waiver waiver then for the you're where said ask a like for you and situation, how process couple I waivers that out it will when ban years. does And got for of have guess? you a process

the allow June to to waiver for application Yes, May on first the Russia point, already for import allows that of a customers. and background, waiting On foreign a reexport to XX, -- Russia DOE's second we the request us request LEU determination. XXXX. filed from July LEU to And waiver DOE and we're and so processing XXXX for importation XX, on just application the issued deliveries company's for waiver were company at our from our committed in customers this on X, that

Russia request importation question, company XXXX have waiver for to for and to So of really in to not allow third yet really that specifically file we from use the customers. in more to answer a plans your U.S. XXXX committed application LEU the

So do intentions yes, the request file DOE. to have to we third a waiver

of Your next Rygiel question the B. Alex line Riley. from comes from

Could you the multiple well environment submitted have talk bid competitive as LEU? been a little for planned the the that bit as for about for bids

question. good Yes, Okay.

enricher. put, -- we is So simply we -- very only Centrus not the

that have are we technology, U.S.-owned currently in other only technology. enrichers, enriching are However, X U.S. company only and Among ourselves runnings. and the the the the proven ones we're

uniquely. that so And think I positions fairly us

call, our for States value commercial mentioned earlier As used technology of America. national security the for could that I provides on, be on very earnings and fact the a unique United to the

And this are so there Western but we specifically are several our fairly uniquely in positioned bid, enrichers, for view.

That's that sort seen Or we there little the Was of year, very, second expectations. therefore, How we is have in-line with should could bit sort quarter these about company SWU any was the think obviously all off? that? then, Kevin, quarter in we think fall revenue you was And of demand and because the of Clearly, line in helpful. comment so a the third And pull-through of for lumpy waivers? strong. mentioned fourth your very too quarter, higher there? as a in should quarter about business third the but here, line level

perspective. that's a comments that Yes, in from and both annual quarter was basis, I -- on Yes, a question. what was the a the in on great revenue it an earlier line, referencing was

out would to strong was. that, to in of were any it quarter expect the it that don't the upon way off come we to quarters So your have We was. always your point question, based the we -- expecting future fall how

was just obviously, mention, positioned your to the LEU And of bid. ones we're only more mention is other earlier that HALEU we this I again, one enriching. part -- on a big focused uniquely currently but in that Alex, wanted to thing one, your we're mean, are I -- answering to question, I the very

be that. We're not world Western ones do in have only we're only U.S. to in the enriching, here the or the to Okay? license that the able

makes I unique. So think that fairly us

comes of question line Partners. Capital the Joseph from from next Reagor Your ROTH

question. strong Amir, the Kevin have quarter. kind on and a to previous congrats team, of a a follow-on do I

about So sales $XXX-ish they $XXX Last year, SWU far, year-to-date, million. million. were were

to and Has higher suggested the price guess, isn't that have the original lumpiness. contract total of some year, year total continue from the you year that, at the changing this slightly, volume sales then SWU guys year think, question. expectation, but it I is will was of for I be this might changed anything the kind because materially to for point, up year suggest your the this be than intra-year would will up,

change are through I XX question, your think would what overall transpired there's June anything expectations basis. an answer our no, To that don't expor- on that's

what go were think nature deliveries largely in the not out needs some reload usually performance And an reflective schedules have It's of to we based you have in annual on is the have quarter move QX in you're seeing that of second basis. seeing so very all -- we that out to you're cyclical, customer wouldn't may back the their And strong expecting an quarters. into our business. same necessarily pricing. always not to It's did that's I are again, XX- deliveries and stronger that the utilities' cycle. pushed XX-month upon

answer question, line forecasted we with the that our in this year. your expectations commencement at falls So of to the

switchover we we question, be was X, cycle, that up which X. year higher Phase that we'll with that under to thing prior reminder, that XX-XX to for have the based would I Centrus one current the government between distribution I the year, on a in revenues as last current the The in that your Technical from the for And arrangement, is And the which Solutions and year and hope X a of note X mid-November, commenced $XX a as compared cost-share Phase million had the realize Phase regards that contribution. remainder going to a X in segment the stronger year to is it cost year. the that upon Phase Joe. goes Phase to contract relates answered and

what Sort limited in of. of And realize give. it's you can kind that I guide guys

Yes.

Is margins, Looking far Is year, XX%. at segment XX%-ish for point, a your to contracts? year. last it's about simply, little [ weaker this about year? Or better of LEU we to the how rolled this year think gross the This are deeper some so of as this next that get ] contracts so this and should roughly And have margin for starting the rest margins that about a was timing? margins sign just is year of timing at off?

a time slug in specific SWU. be the future. that due It's still going note at delivering pretty contracts we're would my mentioned will I current earlier delivery. delivery in in take that comments, different think for margins the primary that -- customers they The our coming of a timing. I be And one when of be to margins. timing thing was have to replicated of prior were where in take replicate is they different and illuminative in the profit largely year, point I one their about we to I realized big that past largely to that the on year expect the the in a we the that, That mean, different that higher deliveries, due may didn't the those margins delivery

what mirror XX-month in Just of a image year. experienced is see didn't don't we last delivery they you cycle, the which take why

floor closing that I Leistikow turn would conclude over to for the like And our Mr. Dan does Q&A remarks. to session. back

investor This quarter call will XXXX. Thank for you, our conclude the of operator. second

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

conference you participation. concludes call. today's your for This Thank

disconnect. You may now