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Centrus reported an adjusted loss of about $9 million for the quarter, down from a profit a year ago, as revenue fell to $55.5 million. Despite the loss, the company grew its total backlog of future contracts to $5.4 billion, which is the key number for its long-term goal of becoming the primary American supplier of nuclear fuel.
The company is currently moving from being a middleman for Russian fuel to producing its own in Ohio. It hit several targets early this quarter, including starting to ship the centrifuges, machines used to enrich uranium, needed for its expansion. While the current results are messy due to this transition, the growing backlog suggests strong demand for a domestic fuel source as the U.S. moves away from Russian imports.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
On October 16, Centrus purchased Westerman Holdings, a firm that makes specialized equipment for the energy industry. The deal cost about $116 million, paid with $95 million in cash and the rest in Centrus stock. Centrus also used part of the purchase price to pay off about $44 million of Westerman's existing debts.
This is a strategic move to secure the company's supply chain. Westerman is a key supplier of components for the centrifuges Centrus uses to enrich uranium. By owning the manufacturer, Centrus reduces the risk of delays in its expansion and adds a new stream of revenue from Westerman's other energy customers.
Source: 8-K filing
UBS lowered its price target for the stock to $120, down from $185 previously. The firm kept its rating at neutral, which means it does not see a clear reason to buy or sell the stock at current levels. This move brings the firm's target closer to the stock's recent trading price after a period of heavy selling in the sector.
Source: UBS
Centrus has granted special stock awards to its top leadership that are tied strictly to the company's progress in enriching uranium. CEO Amir Vexler was granted 5 million dollars in these units, which only vest if the company successfully achieves enrichment from its first cascade, a series of linked machines used to process nuclear fuel. Other executives, including CFO Todd Tinelli and John Donelson, received 2 million dollars each in awards that vest in stages as the Piketon, Ohio facility reaches these technical milestones.
This move aligns management's pay with the company's most critical goal: proving it can produce high-assay nuclear fuel at a commercial scale. Centrus is currently the only American company licensed to produce this specific fuel for next-generation reactors, but its future value depends entirely on moving from demonstration to full-scale production. By making these awards all-or-nothing based on technical success and cost control, the board is signaling that hitting these operational targets is the only priority that matters for the business right now.
Source: 8-K filing
Management has a solid record of clearing the bars they set, beating expectations in six of the last eight quarters. This suggests they have a firm handle on the business even as it shifts from being a middleman to a producer.
| Expectation | |
|---|---|
| EPS | $1.28 |
| Revenue | $173M |
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