Centrus Energy Corp. (NYSE MKT:LEU) Q3 2018 Earnings Conference Call - Final Transcript

Nov 08, 2018 • 08:30 am ET


Centrus Energy Corp. (NYSE MKT:LEU) Q3 2018 Earnings Conference Call - Final Transcript


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Good day. And welcome to Centrus Energy Corp. Q3 2018 Earnings Conference 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. Please go ahead, sir.

Dan Leistikow

Good morning. Thank you for joining us. Today's call will cover the results for the third quarter of 2018 ended September 30th. Here today for the call are Dan Poneman, President and Chief Executive Officer; Marian Davis, Senior Vice President, Chief Financial Officer and Treasurer; John Dorrian, Controller and Chief Accounting Officer.

Before turning the call over to Dan Poneman, I'd like to welcome all of our callers, as well as those listening on our webcast. This conference call follows our earnings news release issued yesterday afternoon. We expect to file our quarterly report on Form 10-Q this afternoon. All of our news releases and SEC filings, including our 10-Ks, 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.

(Forward-Looking Cautionary Statements)

This call is the property of Centrus Energy. Any transcription, redistribution, retransmission or rebroadcast of the call in any form without the express written consent of Centrus is strictly prohibited.

Thank you for your participation and I will now turn the call over to Dan Poneman.

Dan Poneman

Thank you, Dan, and thank you to everyone joining us today. Our results this quarter of $34.1 million in total revenue were in line with our expectations. We continue to be on track to meet our annual guidance for the year on revenue and end of year cash balance, which we are reaffirming today. While the commercial nuclear industry has faced many difficulties in the past decade, I am encouraged about Centrus' future prospects based on developments we have seen in recent months.

Our core nuclear fuel business is getting stronger as we continue to add to our order book. We do business in a highly competitive marketplace, but one advantage we have is that we do not have high fixed costs that come with a commercial productions facility. We have been able to secure long-term supplies from a variety of sources at a time when prices have declined to historic lows and solidify our position as the most diversified supplier in the market.

Through September 30th, our cost of sales per SWU has declined about 15% compared to the same time last year. We anticipate that it will decline again in 2019 with further decreases in subsequent years, because of lower pricing in new supply contracts and contract adjustments on existing contracts. We are starting to see prices firm up at an opportune time.

In September, the UF6 spot price indicator for SWU showed the first increase in 94 months going all the way back to November 2010 and while two months does not make a trend, the spot price