Good morning, ladies and gentlemen and welcome to the Centrus Energy Q1 2025 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday, May 8, 2025. I would now like to turn the conference over to Neal Nagarajan, Head of Investor Relations. Please go ahead.

Good morning. Thank you all for joining us. Today's call will cover the results for the first quarter of 2025 ended March 31. Today we have, Amir Vexler, President and Chief Executive Officer; and Kevin Harrill, Chief Financial Officer. Before turning the call over to Amir Vexler, I'd like to welcome all of our callers, as well as those listening to our webcast. This conference call follows our earnings news release issued yesterday. We expect to file our report for the first quarter on Form 10-Q later today. All of our news releases and SEC filings including our 10-K, 10-Qs and 8-Ks are available on our website. A replay of this call will also be available later this morning on the Centrus website. I would like to remind everyone that certain information we may discuss on this call today may be considered forward-looking information that involves risks and uncertainty, including assumptions about the future performance of Centrus. Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC including our annual report on Form 10-K and quarterly reports on Form 10-Q. Finally, the forward-looking information provided today is time-sensitive and accurate only as of today, May 8, 2025 unless otherwise noted. This call is the property of Centrus Energy. Any transcription, redistribution, retransmission or rebroadcast of the call in any form without the expressed written consent of Centrus is strictly prohibited. Thank you for your participation. And I'll now turn the call over to Amir Vexler.

Thank you, Neal and thank you to everyone on the call today, both long-time listeners and the growing number of those joining us for the first time. This past year and particularly these recent months have seen Centrus make remarkable progress, putting us in a strong position moving forward. We are the only company currently enriching uranium with US-owned, US origin enrichment technology backed by an American supply chain empowered by American workers. And we are proud to lead the effort to provide domestic and global customers with another market participant by standing up and restoring America's ability to enrich uranium. Before turning to the quarter's performance, let me quickly address the current market dynamic. While there is ongoing uncertainty in the global trade environment, we continue to receive shipments of enriched uranium from our suppliers and our operations have not been impacted by tariffs. Furthermore, our centrifuge manufacturing supply chain relies on a growing number of suppliers across the United States. Turning to our quarterly numbers and as previously discussed, it is important to note that there can be a significant amount of variability in our quarterly results due to the nature of our business. The majority of our revenue comes from the LEU segment, where our customers generally have multiyear contracts to take delivery of a given quantity at a given price each year. But customers choose which quarter to take the annual delivery and don't always choose the same quarter every year. Revenues and margins fluctuate depending on how many deliveries happen to fall into a particular quarter and whether those deliveries come from a higher-priced or lower-priced contracts. And as such, we believe our annual results are moving -- are more indicative of our progress. We achieved robust financial results in the first quarter 2025, including…

Thank you, Amir. Good morning, everyone. Centrus reported strong financial results in the first quarter including generating $73.1 million in revenue, an increase of $29.4 million compared to the same quarter last year and $27.2 million in net income compared to a net loss of $6.1 million in the same quarter last year. In addition, we reported a positive gross profit of $32.9 million compared to $4.3 million in the same quarter last year. We also utilized a portion of the $402.5 million convertible debt to extinguish our 8.25% notes and raised net proceeds of $25.4 million under our ATM program. Our LEU business generated $51.3 million in SWU revenue, which was an increase of $27.7 million compared to the same quarter last year. The increase in SWU revenue was as a result of an increase in both the volume sold and the average price per SWU sold. The LEU cost of sales for SWU decreased from $23.1 million in the first quarter of 2024 to $20.1 million in the current quarter. This was primarily due to a decrease in SWU costs which was the result of a 48% decrease in the average unit cost of SWU sold, partially offset by an increase in the volume of SWU sold. We ended the quarter with a gross profit of $31.2 million in our LEU segment compared to $0.5 million in the first quarter of 2024. LEU customers generally have multiyear contracts that carry annual purchase commitments, not quarterly commitments. The revenue and gross profit in our LEU business varies based upon the market conditions at the time the customer contract was signed and the cost of inventory at the time of delivery. Technical Solutions generated $21.8 million in revenue, an increase of $1.7 million compared to the first quarter of 2024…

Thanks, Kevin. I'd like to close by reminding our investors and listeners of the imperative need to both reduce our dependency on foreign nations and to inject more competition into the market to provide customers with more alternatives. Nuclear energy enjoys resounding bipartisan support, and this administration appears to be especially bullish on its prospects. We are the only company with an American technology and an American workforce using an American supply chain that enriches uranium today. All of the other commercial enrichers today are foreign government-owned enterprises and cannot meet our national security needs. It is important to note that in this tariff environment, where global supply chains are being decoupled, we are also the only enricher that actually manufactures our centrifuges in the United States, using an ever-growing number of suppliers across multiple states. We are one of two enrichers to hold an NRC license to produce LEU, and the only NRC licensee for HALEU production. Our technology is tested and proven. Our centrifuges have continued to safely and successfully operate over the last 19 months and have enriched the expected output. And finally there is a clear demand from the market for another proven commercial enricher to provide more competition on top of our two European competitors. Approximately, $2.1 billion of our backlog is in customer contingent LEU sales commitments to support the deployment of our new production facility in Piketon. And we are seeing growing momentum. We definitized $800 million of that $2.1 billion in the first quarter. In short, we meet the markets, the nations and our taxpayers' needs with a proven technology and a domestic supply chain. I would like to close by thanking our growing list of investors, analysts and listeners without whom none of this would be possible. We look forward to updating you on our progress on our next earnings call. With that we are happy to take questions. Operator?

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] One moment please for your first question. Your first question comes from Rob Brown from Lake Street Capital. Please go ahead.

Just wanted to kind of get an update on the Department of Energy activity. I know you can't, sort of, predict their steps but maybe a sense of how the environment is shaping up. I know you got some political support you mentioned but what's sort of the next steps you're looking for out of the DOE at this point?

Good morning. Rob. So since the question really deals with the environment there's been a lot of activity just recently. The Secretary testified on the House as you probably or may have heard yesterday. He was questioned exactly about that as to how fast can we spend, how fast can we go with some of the fuel awards. And the Secretary's answer was that they are moving quickly and they are planning to award the $2.7 billion. So we feel good about the fact that a lot of these funds have not really been affected by any of sort of the DOGE activities out there and the Secretary has seemed to confirm that to the subcommittee. So just from our view we are seeing a lot of activity as well. I feel there is a lot of momentum moving forward in awarding the funds.

Okay. Great. And then it seems like the Russian shipment activity is continuing. Where is that at in terms of the process? Do they still need to get kind of order-by-order agreements? Or is that sort of open now to shipments under a normal course?

As far as I know nothing has changed since the last time we spoke about this. They require specific shipment authorizations from the Russian authorities. Really so far they have been able to conduct their normal course of business and get the authorization. Obviously, we cannot speak or speculate on behalf of what the authorities are going to do but I can report that so far their process has not impeded any of the commitments they have to us.

Okay. Thank you. I will turn it over.

Thank you, Rob.

Thank you. Your next question comes from Ryan Pfingst from B. Riley. Please go ahead.

Hey, guys, thanks for taking my questions. Amir, you mentioned that you're the only licensee for HALEU's production. I'm curious if another entity wanted to pursue that license how long would that take them? And what potential roadblocks would they face from a national security or other standpoint?

Good morning. Good morning, Ryan. That actually is a good question particularly now in the environment that there's a lot of new companies and a lot of entities I guess saying they have a technology or they have ways to enrich, but they do not have any footprint to license the facility or any brick-and-mortar. That is in my view a major obstacle. That is a process that takes years and it is a process that requires tens of millions of dollars to actually get an NRC license. Now, if you are applying for an LEU license that it would be a Category three facility. A higher enrichment like HALEU would be like a Category two facility which is what we have and is quite a bit more strict and stringent around security aspects of it. And so, the short and simple is for somebody that does not have a facility and will have to greenfield it, assuming they have a technology because that opens up an entirely different conversation, assuming they have a technology, but no facility, no license my estimate we're talking about years and tens of millions of dollars at the minimum.

Appreciate that. And it's a good segue into my second question. In the past, you've stated that the first full-scale HALEU cascade could be brought online within 42 months of securing funding. Wondering, if you have an update to that time frame as we likely get closer to the kickoff there.

Good question, Ryan. The update is, I would not change any of the estimates we provided before in the estimate that you just quoted. As you know, and as we've reported previously, we have announced a $60 million supply chain investment. And I can report to you that ACO that's our facility is actively expanding the supply chain, making building improvements qualifying parts production and finalizing the engineering design basis as we prepare for future construction and operation of the enrichment facility. So, I will not change the estimate, but I will say that we are doing quite a bit of work to make sure that that is a solid number and that we stay true to it.

Thanks. Appreciate the detail. I'll turn it back.

Thank you. Your next question comes from Joseph Reagor from ROTH Capital. Please go ahead.

Hi guys. Congrats on a strong start to the year and thanks for taking my questions. So, I guess two things. First, just kind of following up on some of the prior questions. So, I guess on the Q4 announcement you guys specifically said that you'd received at that time three, I think it was licenses for exports from TENEX. And with this update you just kind of said that you've been able to continue business as normal. Should we expect that like going forward from here there won't be like additional number-based updates of how many shipments got licenses for export. And instead it will just be you're able to do business unless we're told otherwise.

Yes. I think we would stick to the general terms of communication as opposed to updating shipment-specific information and obviously, provide a little bit more detail just to give color to it. But from a communication, we will keep it general.

Okay. Yes. And then the second item is for Kevin. So, I noticed on the balance sheet that inventory and old inventory both jumped significantly from Q4 to Q1. And I know that there tends to be some increase in Q1, but it was a bit more than normal. Was there anything in particular driving that?

The only thing that I would say that was the primary drivers of that is as we've talked about before, we do ship and transport inventory and end product from St. Petersburg, Russia into the States. And when those are en route and in transit those have quite a significant value to them, which includes both the SWU and the UF6. So that can drive up the overall total value that is reflected. And you'll typically see and it's reflected in the press release an offset in the liability section. And so that's reflected as inventories owed to customers and suppliers. And so, that would be one of the primary drivers that we have seen that.

Okay. Is it something where this is indicative of near-term potential deliveries for you guys? Or is it, when you get it you get it, and you make your deliveries on some unrelated schedule?

Yes, that's a great question. I think it is indicative of a near-term delivery. That's not always going to be the case or always going to be true, but it is a signal that we do have deliveries that are coming up as we've talked about in the past, the Russian deliveries are typically for the most part just-in-time type shipments. Q – Joseph Reagor: Okay. Thanks. That’s helpful. I’ll turn it over.

Thanks, Joe.

Thank you. Your next question comes from Vikram Bagri from Citi. Please go ahead. Q – Unidentified Analyst: Hi. Good morning. It's Ted [ph] on for Vik. Thanks for taking the question. I wanted to ask about tariffs. Could you give us any insight into how that may be playing into your discussions with customers about their future orders? Has that impacted any timing of when they choose to contract? And then on the supply chain could you just remind us how much of the domestic centrifuge manufacturing is exposed to imports? Or just any color there would be super helpful.

Okay. Great question, Ted. So to date, we have not really seen any impacts from the current tariffs and that have been enacted. We have seen no disruption in our supply chain, again due to tariffs. Just to serve you as a reminder and I think it answers your second question, our European competitor supply chain 100% foreign-based, while our supply chain is made up of a growing number of our suppliers across numerous US states. So it's fully domesticated. So naturally, we have less of an exposure to the impact of tariffs on our supply chain than our European competitors, who manufacture their machines in Europe. So, I hope I answered your question. I think the first part of your question, you weave customers into it. I hope I answered that as well. Q – Unidentified Analyst: Yes. That was helpful. Thank you. And I have a follow-up question. In terms of the task orders that will be issued, could you just remind us what are the various permutations that those could take in terms of cost sharing or various other formats that the DOE might look to? And are you operating under assumption, for any one of those particular to come out?

That is a complex question, that I am not sure that I can really answer, because the way I understood your question is, would the task quarters rely on cost sharing or any other type of contracting mechanism? The answer is, it would be impossible for us to predict at this point. I'd rather really not speculate at this point. So, we stand ready to see what the DOE is going to come out with, and we will be prepared to answer in the best possible way. Q – Unidentified Analyst: Got it. Thank you.

Thank you.

Thank you. Your next question comes from Eric Stine from Craig-Hallum. Please go ahead. Q – Eric Stine: Hi, everyone. Great to chat this morning.

Good morning.

Good morning. Yes. Q – Eric Stine: Good morning. So kind of following up on an earlier question, and I completely realize this may be impossible to answer, but I'll give it a shot. Kevin, I know you talked about the Russian deliveries those are -- or the shipments that those are more just in time. But as we think about 2025, I mean is there -- is there anything that we should think about in terms of timing of SWU and uranium sales? It certainly doesn't look like in the past there's really any rhyme or reason or seasonality to it. So, maybe just any details just to get us all kind of thinking about things, if there is a way that that can be described.

No, thanks for the question. I mean, as you are aware we don't provide financial guidance. So there's nothing significant or material at this time, that we feel would be appropriate to bring up. I think the only thing that I might note is that, our customers are utilities reactors that what ultimately they're looking for is reloads for their locations, which are typically between 18 and 24 months. And so that really is the driver from a timing perspective, as to how the revenues and the SWU And so that really is the driver from a timing perspective as to how the revenues and the SWU revenues materialize from a future perspective. So that I think to a certain extent gives you a sense of how our business works and when we would expect to see the revenue materializing but we couldn't get into any more details just for the fact that we don't provide any future earnings guidance. Q – Eric Stine: Yeah. No understood. Just thought part of the way through the year but I totally get it. It's very difficult to call especially not giving any guidance. So all right. Well obviously you've got the three contracts. You're waiting on the IDIQs. You've talked about that whole process. But correct me if I'm wrong but you've also got an opportunity NNSA opportunity that is separate. So maybe just talk about that the opportunity from a national security perspective confidence next steps et cetera.

I don't know that I can add anything to what's been publicly available out there from the NNSA. Just from a big picture perspective our technology is unobligated that is able to serve national security purposes. It's deployment ready. It really is the only technology that is operating right now that is able to meet our national security needs. I will not venture into predicting what how and when the NNSA may do what. I'll be very careful not to comment on it. But I'll only say that we stand by and we take note of developments and we stand ready to serve. Q – Eric Stine: Got it. Thank you.

Thank you.

Thank you. Your next question comes from Sameer Joshi from H.C. Wainwright. Please go ahead.

Hey, good morning, Amir. Thanks for taking my questions.

Good morning.

Maybe a slightly nuanced question but can you explain the dynamics of the 48% decrease in SWU costs that resulted in nice margins for you this quarter?

I'm sorry Sameer I didn't catch that question. Would you mind repeating that one more time?

Yeah, yeah. So the SWU costs were lower -- cost of SWU was lower by around 48%. Just wanted to understand was it volume related? Or was it some other dynamics playing into that?

Yeah. So I appreciate that question. And so juxtaposing the revenue versus the cost I might answer this in two different ways. We did have fourth quarter deliveries that were delayed due to the Russian Federation permitting and license process that pushed increased volume into the first quarter which significantly impacted our margin realization for the quarter. I think where you're going with it is as it relates to cost. For those transactions we use average costing based upon our accounting practices. So it's really based upon our purchases and sales and how that manifests through our system from an average costing perspective that creates what the ultimate cost is that we take to the bottom line. I think what I would say in addition to that is when you look at it year-over-year I should say quarter-over-quarter on the annual basis we did see better gross profit and this was primarily due to the fact that last year as we noted in our remarks earlier that we had a low-margin shipments from the prior year that impacted both our net income last year as well as our margin realization and that was not replicated in the current year. And the shipments that were deferred and delayed from December into Q1 had a more positive margin realization taking into account everything sort of that I just noted before. Was that -- did that answer your question?

Yeah. No that was good color. I just wanted to make sure that we understood that. Thanks a lot. Second question is on the 5B cylinders. What is the status? I mean I know they were delayed but is there an update on that?

I think the last time we reported that we have a steady flow and fulfillment of our 5B requirements. And that statement is still correct. There is no impact to our production from 5B cylinder sourcing.

Got it. And then just one last one. Can you speak -- I think a previous caller asked about this about the speed at which a competitive HALEU enricher might emerge. But can you give us a lay of the land as what areas or which companies you see as emerging competitors? I think the DOE is also in the process of giving some more contracts for these.

So let me repeat the question. Your question is what is the competitive landscape when it comes to HALEU production in the United States?

Yes.

So as you know part of the DOE's award scope is for HALEU enrichment here in the United States. From a competitive view we really are the only facility that has a CAT two license which allows you to enrich up to 19.75% to enrich HALEU. LES has a facility in New Mexico. I've not checked lately what their license status is but I know that they're not producing HALEU and I don't think they're licensed to produce HALEU either. And so I would not venture to guess if they want to get into that business what will it take for them to amend licenses or make modifications to their systems. I do not know. I will only point to a public statement that they have announced that they're working on HALEU in the United Kingdom not in the United States. So if anybody else wants to get into this game so for example I think Orano had made some announcements maybe not specific to HALEU just generally they made announcements about site selection. I will reference you back to the comment that I made about a greenfield licensing in general. That is something that takes years and tens of millions of dollars and where we have a significant first-mover advantage on. Other than those two competitors there -- I'm assuming there would be others in the competitive landscape. So Laser Enrichment GLE I think made recent announcements. We typically don't comment on competition, but you're more than welcome to read the general announcements. I think that we -- I mean we are enriching. We are a facility that has equipment and license. So I believe that we have a definite advantage. Just as a reminder as well the centrifuge technology is the only proven and viable technology to address the growing demand for enriched uranium at least in the short-term and the mid-term as we see it and as the market has been responding to. I hope that was a comprehensive answer to your question.

Absolutely because one of the nuance I wanted to bring out is that you have the only licensee of the centrifuge technology in the US And I was wondering if any other HALEU producer might required to license that technology from you? Or will they be using some totally different technology? I do understand centrifuge is the best and most available right now.

Yes, correct. I would not venture to speculate on competition beyond some of the established competitors that I mentioned.

Okay. Fair. Thanks a lot for taking my questions.

Thanks, Sameer.

Thank you. There are no further questions at this time. I will now turn the call over to Neal Nagarajan. Please go ahead.

Thank you, operator. This will conclude our investor call for the first quarter of 2025. As always I want to extend a thank you to our listeners online and our analysts who called in. We look forward to speaking with you again next quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.