Centrus Energy Corp.

Greetings. Welcome to Centris Energy first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn your conference over to your host, Dan Leistickow, Vice President, Corporate Communications. Thank you. You may begin.

Good morning. Thank you all for joining us. Today we'll cover the results for the first quarter of 2024, ended March 31st. Today we have Amir Vexler, President and Chief Executive Officer, and Kevin Harrell, our 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 10Q 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 Centris 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 risk and uncertainty, including assumptions about the future performance of Centris. 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, 2024, unless otherwise noted. This call is a property of Centris Energy. Any transcription, redistribution, retransmission, or rebroadcast of the call in any form without the express written consent of Centris is strictly prohibited. Thank you for your participation, and I'll now turn the call over to Amir Vexler.

Amir Vexler Thank you, Dan, and thank you to everyone on the call today. In the first quarter, we achieved $43.7 million in total revenue. $4.3 million in gross profit and a net loss of $6.1 million. As we have said many times before, the best way to look at our business is on an annual basis rather than quarterly because of the way our contracts are structured. Our LEU customers generally have long-term, multi-year contracts that commit them to pay for a given quantity of fuel each year. They decide which quarter to take delivery, which is when we book the revenue. Another factor is the market price of enrichment, which has varied significantly over the last several years, leading to contracts with different pricing depending on when they are signed. So when we have a first quarter with fewer deliveries and lower-priced contracts, we tend to make it up in the rest of the year. Having said that, the fact is this was an incredibly productive quarter for Centris, a period in which we booked new sales achieved new milestones in production of high assay, low-enriched uranium, applied for hundreds of millions of dollars in funding to advance those efforts, and saw Congress approve a historic investment in uranium enrichment. Last year, at our facility in Fiketon, Ohio, Centris embarked on a first-of-a-kind production of high assay, low-enriched uranium, or HALU, the advanced nuclear fuel component needed for the next generation of reactor. In November, we announced the delivery of our first 20 kilograms of HALU under Phase 1 of our competitively awarded contract with the U.S. Department of Energy. As we discussed on our last earning call, the amount of HALU we've been able to produce since that time has been limited as the department continues to experience difficulties in getting us enough HALU storage cylinders for the continuous production of HALU. We don't expect the interruptions in receiving the cylinders to have an adverse material financial impact on Centris since we're continuing to meet our obligations under the contract and the department is compensating us on a cost plus incentive fee basis. We continue to expect that the supply chain issues with the storage cylinders will be resolved sometime later this year and won't be an ongoing issue after that. We've been continuing to fill cylinders as we get them and make additional deliveries to the department. I am happy to announce that we have now reached about 135 kilograms of cumulative production. We are encouraged that President Biden also highlighted our successful HALU production in the recent speech. The President also noted that the United States has depended on imported fuel for too long. and expressed his commitment to making a multi-billion dollar investment to enrich uranium here in the U.S. Centris is proud to be leading the effort to restore America's domestic uranium enrichment capacity at scale. We are the only American-owned U.S. technology enricher. We are the only enricher who manufactures our centrifuges in the United States. We rely on American workers and the U.S. supply chain. Our Ohio plant is the only place in the Western world licensed for halo production. It is one of just two sites in the United States that is licensed to produce low-enriched uranium for existing reactors, and the only one of those sites that is American-owned. We have barely scratched the surface of what's possible in Piketon. Our facility is as large as the Pentagon, with room for thousands of centrifuges. In addition to supplying HALU for the next generation of reactors, we also could have an opportunity to produce and supply low-enriched uranium for the existing fleet of reactors. The LEU market is very large today. The enrichment component in the United States is worth about $2.4 billion annually at today's prices. The accessible market internationally is currently about $1.9 billion per year. We are also uniquely positioned to meet U.S. national security needs since those missions require the use of U.S. origin enrichment technology, and we have the only U.S. enrichment technology that is deployment ready. To be clear, scaling up production of either HALU or LEU will require a robust public-private partnership. It will take a significant federal investment alongside private capital and commercial off-day contracts. Every other enrichment plant in the world is state-owned and has been built on the backs of similar partnerships from their supporting governments. A robust federal investment is critical in leveling the playing field for an American producer. The good news is that we are taking steps towards building that kind of a partnership. In this quarter, Centra submitted proposals to the Department of Energy in response to two RFPs as part of a program designed to stimulate halo production at scale by government purchases. We are looking forward to the department's decision later this year. The RFPs contemplate up to $3.5 billion in long-term awards, which would include the cost of mining and milling the uranium, converting it to uranium hexafluoride, enriching it, and deconverting it to different forms. The Department has about $700 million in initial funding as part of the Inflation Reduction Act. And in March, with overwhelming support from Republicans and Democrats, Congress passed and the President signed new legislation that provided an additional $2.7 billion to jumpstart domestic production of both LEU and HABLE. We look forward to competing for this funding as soon as it becomes available. and believe we are all well positioned to do so. The appropriations bill made the funding contingent upon either Congress or the President placing some additional restriction on imports of Russian uranium, which Congress did on April 30th. The ban will be effective 90 days after the President's signature, but it allows for a waiver process that runs through 2028 to allow time for new enrichment capacity to come online. We are engaging with policymakers on how best to implement an efficient and predictable waiver process. Prompt approvals of this waiver is critical not only to Centris, but the entire U.S. nuclear industry. We've talked about the public side of the public-private partnership. Now, what about the private side? Here again, the private sector is stepping up. I am pleased to announce that over the last few months, Centris has secured approximately $900 million in conditional sales commitments to support our effort to return to production of LEU. Subject to signing definitive contracts, these commitments are contingent upon Centris securing sufficient public and private investment to build the LEU enrichment capacity. They reflect the resolve of our customer base to support a new American producer of LEU that can bring greater competition to the marketplace and reduce our industry dependence on Russian nuclear fuel. And it shows that the private sector is ready to do its part as part of a national effort to restore America's nuclear fuel supply chain. Between HALU and LEU, we see a tremendous opportunity to address a large and critical market as the only publicly traded enrichment company and the only company in the United States to hold necessary licenses to produce both HALU and LEU. With that, I'm going to turn things over to Kevin.