Company: LEU
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001065059-25-000024
Chunk: 19

Company: CENTRUS ENERGY CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 19
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 revenue generated by the HALEU Operation Contract. Revenue from the HALEU Operation Contract is recorded on a cost-plus-incentive-fee basis and includes a target fee for Phase 2 of the contract.

Cost of Sales

Cost of sales for the LEU segment was $20.1 million and $23.1 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of $3.0 million (or 13%). SWU costs decreased as a result of a 48% decrease in the average unit cost of SWU sold, partially offset by a 49% increase in the volume of SWU sold. Cost of sales for the three months ended March 31, 2025 and 2024, included $2.1 million and $0.3 million, respectively, for the revaluation of inventory loans.

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Cost of sales for the Technical Solutions segment was $20.1 million and $16.3 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $3.8 million (or 23%). The increase is primarily attributable to a $4.1 million increase in costs incurred under the HALEU Operation Contract, partially offset by a decrease in costs related to other contracts.

Gross Profit

Gross profit for the LEU segment was $31.2 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $30.7 million (or 6,140%). LEU customers generally have multi-year contracts that carry annual purchase commitments, not quarterly commitments. The gross profit in our LEU business varies based upon the timing of those contracts. The pricing applied to deliveries varies depending upon the market conditions at the time the contract was signed. The increase for the three months ended March 31, 2025 was due to the increase in sales volume and composition of contracts in the current quarter.

Gross profit for the Technical Solutions segment was $1.7 million and $3.8 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of $2.1 million (or 55%). The decrease was primarily attributable to the factors discussed above. Because of the delay in completing Phase 2 of the HALEU Operation Contract, in November 2024, DOE extended Phase 2 to June 30, 202