Lightbridge Corporation (NASDAQ: LTBR), a nuclear fuel technology company, provided an update on its business developments and financial results during its fiscal year 2023 earnings call.
The company reported progress in its nuclear fuel technology, with its Lightbridge Fuel reaching Technology Readiness Level (TRL) 4 to 5, indicating successful laboratory validation and preparations for in-reactor testing.
Despite a net loss of $7.9 million for the year, the company has a strong financial position with $28.3 million in working capital and is optimistic about the increasing global demand for nuclear power.
Key Takeaways
- Lightbridge Fuel has achieved TRL 4 to 5, signaling readiness for in-reactor testing.
- Partnerships with Centrus Energy (NYSE:LEU) and the Pitesti Nuclear Research Institute have been established.
- The company plans to expand its fuel development team and conduct an engineering study for CANDU reactors.
- Global nuclear power demand is on the rise, potentially increasing the market for Lightbridge Fuel.
- Financially, Lightbridge has a working capital of $28.3 million and total assets of $29.4 million.
- The company reported a net loss of $7.9 million for 2023 but expects government funding and strategic alliances to support future R&D.
Company Outlook
- Lightbridge anticipates increased demand for nuclear power and advanced nuclear fuel.
- The company plans to leverage global trends towards small modular reactors and nuclear newbuilds.
- Government funding and new strategic alliances are expected to contribute to future financial stability.
Bearish Highlights
- Lightbridge Fuel reported a net loss of $7.9 million in 2023.
- R&D expenses increased by $1.2 million due to fuel development activities.
- Other operating income dropped to zero with the completion of a project.
Bullish Highlights
- Uranium prices are approaching record highs, beneficial for the nuclear industry.
- The company sees potential growth in market size due to reactor license extensions, newbuilds, and restarts.
Misses
- Net loss increased slightly from $7.5 million in the previous year to $7.9 million in 2023.
- Total G&A expenses decreased due to lower employee compensation and benefits.
Q&A Highlights
- Lightbridge discussed the potential for nuclear expansion to increase their market size.
- The company emphasized its strong working capital position to support fuel development expenditures.
- Interest was expressed in the company's strategies for capitalizing on the growing nuclear power trend.
InvestingPro Insights
Lightbridge Corporation (NASDAQ: LTBR) has been navigating through a challenging financial period as evidenced by the recent data. The company's market capitalization stands at $36.68 million, reflecting its position in the market. While the net loss of $7.9 million reported for the fiscal year 2023 is significant, it is worth noting that Lightbridge holds more cash than debt, which is a positive sign for the company's liquidity and financial health.
InvestingPro Tips indicate that Lightbridge's liquid assets exceed its short-term obligations, demonstrating the company's ability to meet its short-term financial commitments. However, the company's weak gross profit margins and the fact that it has not been profitable over the last twelve months remain areas of concern. Additionally, Lightbridge does not pay a dividend to shareholders, which could be a factor for investors seeking income-generating investments.
Key InvestingPro Data metrics for Lightbridge include:
- A Price to Earnings (P/E) Ratio of -4.34, indicating that the company is not currently generating profits relative to its share price.
- A Price to Book (P/B) Ratio of 1.27 as of the last twelve months ending Q4 2023, suggesting that the stock is trading at a level slightly above its book value.
- A negative Return on Assets (ROA) of -26.87% for the same period, highlighting challenges in generating earnings from its asset base.
For investors interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/LTBR. These tips can provide further insight into Lightbridge's financial health and market position. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and unlock the full potential of InvestingPro's analytical tools.
Full transcript - Lightbridge Corp (LTBR) Q4 2023:
Operator: Thank you for standing by, and welcome to the Lightbridge Corporation Business Update and Fiscal Year 2023 Conference Call. Please note that today's call is being recorded. It is now my pleasure to introduce Matthew Abenante, Director of Investor Relations for Lightbridge Corporation.
Matthew Abenante: Thank you, Abigail, and thanks to all of you for joining us today. The company's earnings press release was distributed yesterday and can be viewed on the Investor Relations page of the Lightbridge website at www.ltbridge.com. Joining us on the call today is Seth Grae, Chief Executive Officer; along with Andrey Mushakov, Executive Vice President for Nuclear Operations; Scott Holcombe, Vice President of Engineering; Larry Goldman, Chief Financial Officer; and Sherrie Holloway, Controller. I would like to remind our listeners that any statements on this call that are not historical facts are forward-looking statements. Today's presentation includes forward-looking statements about the company's competitive position and product and service offerings. During today's call, words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. This presentation is based on current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from such estimates. These and other risks are set forth in more detail in Lightbridge's filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements, whether as a result of new developments or otherwise. And with that, I would like to turn the call over to our first speaker, Seth Grae, Chief Executive Officer of Lightbridge. Good morning, Seth.
Seth Grae: Thank you, Matt, and thank you all for joining us to discuss Lightbridge's 2023 results. I am pleased with the momentum building within the nuclear sector and the pivotal role Lightbridge is poised to play in this transformative period. Our advancements in fuel technology, combined with a growing network of strategic partnerships position us to address the challenges and opportunities presented by the emerging global mandates to greatly expand nuclear capacity. In 2023, Lightbridge achieved several key milestones and made important advancements in our ongoing fuel development efforts. Earlier in the year, we strengthened our leadership team by welcoming Sherrie Holloway and Dr. Scott Holcombe to our team. Mr. Goodman, a recognized national security expert, joined Lightbridge as an independent director, bringing invaluable insights into the intersection of energy and national security. As our new Vice President of Engineering, Dr. Holcombe brings extensive expertise in nuclear fuel and materials development and management of interdisciplinary teams of engineers and subject matter experts, further bolstering our nuclear fuel technology leadership. In December, we announced an agreement with Centrus Energy to conduct a front-end engineering and design study for a Lightbridge pilot fuel fabrication facility in Piketon, Ohio. Centrus currently hosts a U.S.-based production facility for high-assay low-enriched uranium or HALO, partnering with the U.S. Department of Energy, DOE, on the site. The key objective of the FEED study is to determine the scope of work, cost and schedule estimates and identify key risk factors for establishing a Lightbridge Pilot Fuel Fab facility. The results of this study will form the basis for a decision on the way for establishing the Lightbridge Pilot Fuel Fab facility for manufacture of full length fuel rods for demonstrating and licensing Lightbridge Fuel in commercial reactors. We also entered into an agreement with the Pitesti Nuclear Research Institute, known as RATEN ICN, based in Romania, to assess the compatibility of Lightbridge Fuel for use in CANDU reactors. This study will identify any critical parameters for further evaluation and design. The findings will guide future economic evaluations and support navigating potential regulatory licensing related issues. If feasibility of using Lightbridge Fuel in CANDU reactors is confirmed, we believe this type of reactor may offer an opportunity for faster time to market due to the unique design and operating conditions of CANDU reactors. Last summer, we announced a research study led by Texas A&M University and including Lightbridge, NuScale Power and Structural Integrity Associates as part of the DOE Nuclear Energy University Program R&D awards. This project focuses on thermal hydraulic modeling and testing which aims to increase the understanding of the overall performance of Lightbridge Fuel under simulated normal and off normal conditions in NuScale's SMR. This follows a similarly structured study with MIT announced in 2022 that focuses on Neutronics modeling and safety evaluation of Lightbridge Fuel in the NuScale SMR. In an effort to better communicate our fuel development progress to industry, investors and other key stakeholders, Lightbridge is adopting the technology readiness level or TRL system. We are using the TRL framework to plan our development in a logical and efficient way. The TRL system was originally developed by NASA and is widely recognized across technical industries. The organization for economic cooperation and development, the OECD includes a nuclear energy agency, which provides a standardized TRL framework for assessing and communicating the maturity of nuclear fuel technology. As with NASA's TRLs, this framework encompasses a scale from 1 to 9 with TRL 1 representing the initial concept or theoretical stage and TRL 9 denoting a technology that has been proven in its operational environment. Utilizing the TRL system allows Lightbridge to map the development of our nuclear fuel technology against a clear standardized metric, enabling stakeholders to gauge progress in a structured and transparent manner. Currently, we believe Lightbridge Fuel is positioned at TRL 4 to 5, indicating a significant phase in our development process. At this stage, Lightbridge fuel has moved beyond TRL 1 to 3 theoretical research and entered into the realm of validation in a laboratory environment or TRL 4 and preparations for validation in representative operating conditions or TRL 5. This signifies that the core principles underlying Lightbridge Fuel have been successfully demonstrated through a number of computer modeling analyses and initial proof-of-concept experiments. We expect our ongoing project at INL will generate in-reactor data to further validate thermophysical properties of our uranium-zirconium alloy in coupon samples, which supports late stages of TRL 4. As the next step, we plan to conduct a radiation testing of rodlets with our uranium-zirconium alloy to verify the technology's performance under conditions that will closely simulate operational scenarios. This work will support TRL 5. This will signify a pivotal transition from conceptual designs and laboratory tests to in-reactor testing in representative and actual conditions the fuel will experience in commercial reactors. This phase is critical for demonstrating our fuels design, materials performance and identifying potential challenges, allowing for adjustments and enhancements before advancing to system prototype demonstration in operational environments, which make up TRL 6 and 7. Achieving TRL 4 to 5 is an important milestone that validates Lightbridge Fuel and our achievements thus far and sets the stage for subsequent development steps moving us closer to commercialization and widespread adoption of our advanced nuclear fuel, which will be TRL 8 and 9. I'll turn the call over to Andrey Mushakov, Executive VP for Nuclear Operations, to review our ongoing fuel development activities. Andrey?
Andrey Mushakov: Thank you, Seth. I'll now discuss our ongoing project, the Idaho National Laboratory. In 2023, we completed several key project milestones at Idaho National Laboratory. First, we issued a quality implementation plan for our collaborative project to ensure work conducted at Idaho National Laboratory and results on test date on our project would meet nuclear industry quality assurance requirements. Two, we issued a fuel specification for the coupon samples that we are currently working on to prepare for irrigation testing on the advanced test reactor. Three, we formed the initial casting and characterization of several of [indiscernible] ingots using Idaho National Laboratory's existing equipment with depleted uranium and zirconium alloy materials. And four, we performed additional casting of larger sized ingots using depleted uranium and zirconium materials. This year, in 2024, we plan to, number one, continue to validate the casting process on scaled up ingots with depleted uranium; two, perform initial extrusion demonstration with depleted uranium using larger sized ingots; three, advance our procurement efforts for custom Lightbridge Extrusion tooling for Idaho National Laboratory facility; and five, update neutronic and thermal analysis for the experimental data package. Once the demonstration work with depleted uranium produced acceptable results, Idaho National Laboratory will now manufacture coupon samples using enriched uranium for insertion on the advanced test reactor for radiation testing under -- on the conditions that will simulate the performance of our fuel. This work supports the late stages of TRL 4. Experimental data obtained during subsequent postradiation examination work to be released as future project test statement under our existing agreement with Idaho National Laboratory will be vital for our model development and validation efforts. Now I'll ask Scott Holcombe, our Vice President of Engineering, to give us an update on several other ongoing projects and initiatives. Scott?
Scott Holcombe: Thank you, Andrey. First, we are expanding our fuel development team. This expansion aims to build our in-house computer modeling capabilities in critical areas such as neutronics, thermal hydraulics, fuel performance and transient analysis. We believe this will support advancement through TRL levels 4 to 9 as it underpins our ability to model and simulate our fuel's behavior under various operating conditions, an essential aspect of our development process. Additionally, we're progressing with our engineering study for the use of Lightbridge Fuel in CANDU reactors in collaboration with RATEN ICN. This study is evaluating the compatibility and suitability of Lightbridge Fuel for use in CANDU pressurized heavy water reactors, which spans activities pre-TRL level 4, confirming the feasibility of our fuel in another reactor type. Finally, our announced FEED study for our Lightbridge pilot fuel fabrication facility in Piketon, Ohio with Centrus Energy could support activities across TRL levels 5 to 8, moving us closer to realizing our vision for commercial scale fuel rod manufacturing. With that, I'll turn the call back over to Seth.
Seth Grae: Well, thank you, Scott. For the first time at a UN COP conference of the parties at global climate change events at COP28 in December in Dubai, nuclear energy was recognized alongside other clean energy sectors in the negotiation's final statement. In addition, the United States and over 20 other countries pledged to triple nuclear energy capacity globally by 2050. This ambitious goal requires maintaining the operation of approximately 400 large nuclear reactors currently in operation worldwide, including 93 in the United States and constructing around 800 more large reactors. This would represent an unprecedented expansion of nuclear power infrastructure. Today, nearly three months after COP28, there are 62 large reactors under construction with over 100 more plants to be built and public proposals for another 300 reactors. Almost all of these are for large reactors. Moreover, should the industry shift its focus toward small modular reactors, the required number could escalate dramatically potentially to thousands of units, depending on their individual capacities. We are seeing signs of the shift towards greater demand for nuclear power across the supply chain, not just in license extension for existing plans and reactor newbuilds, but also restarts of previously shut down reactors. Uranium prices are approaching record highs across both the commodity and ETFs, outpacing even the NASDAQ 100 index since the pandemic. This approaching nuclear expansion could increase the potential size of addressable market for Lightbridge Fuel. We anticipate a potential increase in demand for more efficient, safer and economically viable nuclear fuel. This makes Lightbridge Fuel an attractive option for both the existing reactors and the future plants being built today and in the future. Going forward, our focus remains on advancing our fuel development, strengthening our collaborations with both industry and academic partners and hitting our key milestones. Our ongoing research and development efforts and strong intellectual property portfolio position us favorably in an industry set to expand dramatically throughout the world, ensuring that Lightbridge remains at the forefront of the nuclear renaissance that's underway. I will now turn the call over to Larry Goldman, Chief Financial Officer, to summarize the company's financial results. Larry?
Lawrence Goldman: Thank you, Seth, and good morning, everyone. For further information regarding our year-end 2023 financial results and disclosures, please refer to our earnings release that we filed yesterday as well as our annual report on Form 10-K that will be filed with the Securities and Exchange Commission within the next few days. The company's working capital position was $28.3 million at December 31, 2023, versus $28.7 million at December 31, 2022. The Total assets were $29.4 million and total liabilities were $0.5 million at December 31, 2023. Today, we have ample working capital and financial flexibility to support our near-term fuel development expenditures. This is very important to Lightbridge and our stockholders, as well as our external stakeholders such as the federal government to ensure that we have sufficient working capital as well as the ability to access capital in the future in order to conduct our R&D activities. Total cash and cash equivalents were $28.6 million as compared to $28.9 million at December 31, 2022, a decrease of $0.3 million for the year ended December 31, 2023. Total cash used in operating activities for the year ended December 31, 2023, was $6.5 million, a decrease of $0.2 million compared to the $6.7 million of cash used in operating activities for the year ended December 31, 2022. Total cash provided by financing activities for the year ended December 31, 2023, was $6.2 million, a decrease of $4.7 million compared to the $10.9 million for the year ended December 31, 2022. This decrease was due to a decrease in the net proceeds from the issuance of common stock by our at-the-market or ATM facility. In support of our long-term business and future financing requirements with respect to our fuel development, we expect to continue to see government funding in the future, along with new strategic alliances that may contain cost-sharing contributions and additional funding from others in order to help fund our future R&D milestones leading to the commercialization of Lightbridge Fuel. I will now turn the call over to Sherrie Holloway, our Controller, who will go over our P&L financial information for the year 2023. Sherrie?
Sherrie Holloway: Thank you, Larry. Net loss was $7.9 million for the year ended December 31, 2023, compared to $7.5 million for the year ended December 31, 2022. Total R&D expenses amounted to $1.9 million for the year ended December 31, 2023, compared to $0.7 million for the year ended December 31, 2022, an increase of $1.2 million. This increase was primarily due to the increase in R&D activities related to the development of our fuel. This increase primarily consisted of an increase in INL project labor costs of $0.8 million, an increase in allocated employee compensation and employee benefits of $0.4 million, an increase in consulting expenses of $0.1 million, an increase in travel expenses of $0.1 million and an increase in stock-based compensation expenses of $0.1 million. This increase was offset by decrease of $0.3 million, primarily related to Gateway for Accelerated Innovation in Nuclear (GAIN) voucher work recorded as research and development expenses in 2022 that was completed in the first quarter of 2023. Total G&A expenses were $7.1 million for the year ended December 31, 2023, compared to $7.5 million for the year ended December 31, 2022. The decrease of $0.4 million was primarily due to a decrease in employee compensation and employee benefits of $0.4 million due to the increase in the time allocation percentage of in-house employee labor costs to research and development expenses, a decrease in consulting expenses of $0.1 million, a decrease in insurance expense of $0.1 million, decrease in dues and subscriptions of $0.1 million and a decrease in promotion expenses of $0.1 million offset by increase in stock-based compensation of $0.4 million, which was due to the partial vesting for restricted stock awards granted in 2022. Total stock-based compensation included in G&A expenses was $1.1 million for the years ended December 31, 2023 and 2022. Total other operating income was 0 for the year ended December 31, 2023, compared to $0.4 million for the year ended December 31, 2022; this $0.4 million decrease was due to the GAIN Voucher project that was completed in the first quarter of 2023. Total other income was $1.1 million for the year ended December 31, 2023, compared with other income of $0.3 million for the year ended December 31, 2022, an increase of $0.8 million. The increase in other income was due to an increase in interest income earned from the purchase of treasury bills and from our bank savings account. Back to you, Seth.
Seth Grae: Thank you, Sherrie, and thank you, everybody, for participating on today's call. I understand there aren't questions. We look forward to providing additional updates. In the meantime, you can reach us at ir@ltbridge.com. Stay safe and well. Goodbye.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator:
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