Centrus Reports Third Quarter 2022 Results
Centrus Energy Corp. (NYSE American: LEU) reported third quarter 2022 results, showing a net loss of $6.1 million on revenues of $33.2 million, down from a net income of $42.1 million on $91.3 million in Q3 2021. The decrease in revenue is attributed to reduced sales in both the LEU and Technical Solutions segments. However, the company secured over $270 million in new sales contracts year-to-date, indicating strong future demand. Centrus continues to meet U.S. Department of Energy milestones for HALEU production, positioning itself well in the nuclear energy sector.
- Secured over $270 million in new sales contracts and commitments year-to-date.
- Continued meeting DOE milestones for HALEU production.
- Well positioned as the only U.S. operator with a license to produce HALEU.
- Net loss of $6.1 million compared to a net income of $42.1 million in Q3 2021.
- Total revenue decreased by $58.1 million year-over-year.
- Cost of sales in Technical Solutions segment decreased significantly, leading to reduced profits.
- Secured more than
$270 million in new sales contracts and commitments year-to-date - Continued to meet all milestones under the contract with the U.S. Department of Energy (DOE) to deploy a cascade of centrifuges to demonstrate production of High-Assay, Low-Enriched Uranium (HALEU)
- Net loss of
$6.1 million on revenue of$33.2 million in Q3 2022, compared to net income of$42.1 million on$91.3 million in revenue in Q3 2021
BETHESDA, Md., Nov. 8, 2022 /PRNewswire/ -- Centrus Energy Corp. (NYSE American: LEU) ("Centrus" or the "Company") today reported third quarter 2022 results. The Company reported a net loss of
"While our third quarter results reflected the typical lumpiness attributable to the timing of customer deliveries that we regularly discuss on earnings calls, we continued to see strong momentum across our business segments, as reflected in both our total order book value and in the broader trends toward greater investment in nuclear energy," said Centrus President and CEO Daniel B. Poneman. "Congress approved a
Centrus generated total revenue of
Revenue from the LEU segment was
Revenue from the Technical Solutions segment was
Cost of sales for the LEU segment was
Cost of sales for the Technical Solutions segment was
Gross profit for the Company was
On September 14, 2022, Centrus announced that it had secured more than
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.
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 imposed 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 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 receive payments, receive the return of natural uranium, as a result of any government, international or corporate actions or directions or other reasons; 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 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 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") or other suppliers; 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 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) 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 Contract and may not be able or allowed 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
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 at LeistikowD@centrusenergy.com
Media: Lindsey Geisler at GeislerLR@centrusenergy.com
CENTRUS ENERGY CORP.
ADJUSTED NET INCOME (LOSS) 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 September 30, | Nine Months Ended September 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Numerator (in millions): | |||||||
Net income (loss) | $ (6.1) | $ 42.1 | $ 30.9 | $ 58.8 | |||
Less: Preferred stock dividends - undeclared and cumulative | — | 0.7 | — | 2.1 | |||
Less: Distributed earnings allocable to retired preferred shares | — | — | — | 6.6 | |||
Net income (loss) allocable to common stockholders | $ (6.1) | $ 41.4 | $ 30.9 | $ 50.1 | |||
Plus: Distributed earnings allocable to retired preferred shares | $ — | $ — | $ — | $ 6.6 | |||
Adjusted net income (loss), including distributed earnings allocable to retired preferred shares (Non-GAAP) | $ (6.1) | $ 41.4 | $ 30.9 | $ 56.7 | |||
Denominator (in thousands): | |||||||
Average common shares outstanding - basic | 14,623 | 13,741 | 14,586 | 13,365 | |||
Average common shares outstanding - diluted | 14,623 | 14,056 | 14,974 | 13,702 | |||
Net income (loss) per share (in dollars): | |||||||
Basic | $ (0.42) | $ 3.01 | $ 2.12 | $ 3.75 | |||
Diluted | $ (0.42) | $ 2.95 | $ 2.06 | $ 3.66 | |||
Plus: Effect of distributed earnings allocable to retired preferred shares, per common share (in dollars): | |||||||
Basic | $ — | $ — | $ — | $ 0.49 | |||
Diluted | $ — | $ — | $ — | $ 0.48 | |||
Adjusted Net Income (Loss) per Share (Non-GAAP) (in dollars): | |||||||
Basic | $ (0.42) | $ 3.01 | $ 2.12 | $ 4.24 | |||
Diluted | $ (0.42) | $ 2.95 | $ 2.06 | $ 4.14 | |||
CENTRUS ENERGY CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited; in millions, except share and per share data) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Revenue: | |||||||
Separative work units | $ 7.7 | $ 19.1 | $ 106.0 | $ 102.4 | |||
Uranium | 12.5 | 12.9 | 17.4 | 12.9 | |||
Technical solutions | 13.0 | 59.3 | 44.2 | 94.0 | |||
Total revenue | 33.2 | 91.3 | 167.6 | 209.3 | |||
Cost of Sales: | |||||||
Separative work units and uranium | 18.9 | 23.7 | 59.8 | 76.1 | |||
Technical solutions | 12.0 | 18.1 | 38.3 | 54.9 | |||
Total cost of sales | 30.9 | 41.8 | 98.1 | 131.0 | |||
Gross profit | 2.3 | 49.5 | 69.5 | 78.3 | |||
Advanced technology costs | 5.4 | 0.6 | 10.0 | 1.3 | |||
Selling, general and administrative | 8.6 | 9.0 | 24.4 | 25.0 | |||
Amortization of intangible assets | 1.1 | 1.7 | 6.2 | 5.4 | |||
Special charges for workforce reductions | — | — | 0.5 | — | |||
Operating income (loss) | (12.8) | 38.2 | 28.4 | 46.6 | |||
Nonoperating components of net periodic benefit income | (4.4) | (4.3) | (11.1) | (12.9) | |||
Interest expense | 0.1 | — | 0.1 | — | |||
Investment income | (0.6) | — | (0.8) | — | |||
Income (loss) before income taxes | (7.9) | 42.5 | 40.2 | 59.5 | |||
Income tax expense (benefit) | (1.8) | 0.4 | 9.3 | 0.7 | |||
Net income (loss) and comprehensive income (loss) | (6.1) | 42.1 | 30.9 | 58.8 | |||
Preferred stock dividends - undeclared and cumulative | — | 0.7 | — | 2.1 | |||
Distributed earnings allocable to retired preferred shares | — | — | — | 6.6 | |||
Net income (loss) allocable to common stockholders | $ (6.1) | $ 41.4 | $ 30.9 | $ 50.1 | |||
Net income (loss) per share: | |||||||
Basic | $ (0.42) | $ 3.01 | $ 2.12 | $ 3.75 | |||
Diluted | $ (0.42) | $ 2.95 | $ 2.06 | $ 3.66 | |||
Average number of common shares outstanding (in thousands): | |||||||
Basic | 14,623 | 13,741 | 14,586 | 13,365 | |||
Diluted | 14,623 | 14,056 | 14,974 | 13,702 | |||
CENTRUS ENERGY CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in millions) | |||
Nine Months Ended September 30, | |||
2022 | 2021 | ||
OPERATING | |||
Net income | $ 30.9 | $ 58.8 | |
Adjustments to reconcile net income to cash used in operating activities: | |||
Depreciation and amortization | 6.7 | 5.8 | |
Accrued loss on long-term contract | (0.5) | (6.5) | |
Deferred tax assets | 8.8 | (0.1) | |
Equity related compensation | 2.2 | 0.4 | |
Revaluation of inventory borrowing | 5.5 | 4.8 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 21.8 | 12.7 | |
Inventories | (98.9) | 0.1 | |
Inventories owed to customers and suppliers | 66.9 | 2.1 | |
Other current assets | (16.6) | (1.5) | |
Accounts payable and other liabilities | (1.9) | 7.2 | |
Payables under inventory purchase agreements | (16.3) | (19.0) | |
Deferred revenue and advances from customers, net of deferred costs | (30.4) | (8.6) | |
Pension and postretirement benefit liabilities | (13.0) | (55.3) | |
Other, net | (0.3) | (0.1) | |
Cash provided by (used in) operating activities | (35.1) | 0.8 | |
INVESTING | |||
Capital expenditures | (0.6) | (0.7) | |
Cash used in investing activities | (0.6) | (0.7) | |
FINANCING | |||
Proceeds from the issuance of common stock, net | — | 27.2 | |
Exercise of stock options | 0.2 | 0.5 | |
Withholding of shares to fund grantee tax obligations under stock-based compensation plan | (1.9) | (2.4) | |
Payment of interest classified as debt | (6.1) | (6.1) | |
Other | (0.3) | (0.3) | |
Cash provided by (used in) financing activities | (8.1) | 18.9 | |
Increase (decrease) in cash, cash equivalents and restricted cash | (43.8) | 19.0 | |
Cash, cash equivalents and restricted cash, beginning of period | 196.8 | 157.9 | |
Cash, cash equivalents and restricted cash, end of period | $ 153.0 | $ 176.9 | |
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 | |
Disposal of right to use lease assets from lease modification | $ — | $ 1.0 | |
Property, plant and equipment included in accounts payable and accrued liabilities | $ — | $ 0.4 | |
Equity issuance costs included in accounts payable and accrued liabilities | $ — | $ 0.1 | |
CENTRUSENERGY CORP CONSOLIDATED BALANCE SHEETS (Unaudited; in millions, except share and per share data) | |||
September 30, | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 131.7 | $ 193.8 | |
Accounts receivable | 7.4 | 29.1 | |
Inventories | 209.3 | 91.1 | |
Deferred costs associated with deferred revenue | 135.3 | 143.3 | |
Other current assets | 25.2 | 8.6 | |
Total current assets | 508.9 | 465.9 | |
Property, plant and equipment, net of accumulated depreciation of | 5.4 | 5.3 | |
Deposits for financial assurance | 21.1 | 2.8 | |
Intangible assets, net | 48.5 | 54.7 | |
Deferred tax assets | 32.6 | 41.4 | |
Other long-term assets | 1.7 | 2.3 | |
Total assets | $ 618.2 | $ 572.4 | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||
Current liabilities: | |||
Accounts payable and accrued liabilities | $ 30.0 | $ 37.8 | |
Payables under inventory purchase agreements | 21.5 | 37.9 | |
Inventories owed to customers and suppliers | 75.4 | 8.4 | |
Deferred revenue and advances from customers | 264.9 | 303.1 | |
Current debt | 6.1 | 6.1 | |
Total current liabilities | 397.9 | 393.3 | |
Long-term debt | 95.7 | 101.8 | |
Postretirement health and life benefit obligations | 112.8 | 114.9 | |
Pension benefit liabilities | 12.4 | 23.1 | |
Advances from customers | 46.2 | 45.1 | |
Long-term inventory loans | 45.8 | 22.4 | |
Other long-term liabilities | 7.7 | 13.7 | |
Total liabilities | 718.5 | 714.3 | |
Stockholders' deficit: | |||
Preferred stock, par value | |||
Series A Participating Cumulative Preferred Stock, none issued | — | — | |
Series B Senior Preferred Stock, none issued | — | — | |
Class A Common Stock, par value | 1.4 | 1.4 | |
Class B Common Stock, par value | 0.1 | 0.1 | |
Excess of capital over par value | 151.7 | 140.7 | |
Accumulated deficit | (253.7) | (284.6) | |
Accumulated other comprehensive income | 0.2 | 0.5 | |
Total stockholders' deficit | (100.3) | (141.9) | |
Total liabilities and stockholders' deficit | $ 618.2 | $ 572.4 | |
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SOURCE Centrus Energy Corp.
FAQ
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