-
Gross profit of
$5.5 million for the quarter and$21.3 million for the six-month period endedJune 30, 2016 -
Net loss of
$2.9 million on revenue of$63.4 million for the quarter -
Repurchased 10 percent of long-term debt during the quarter,
generating a
$16.7 million gain -
On track to achieve 2016 guidance of
$275-$300 million in revenue and$200-$250 million year-end cash balance
“The second quarter was a steady one for Centrus, and we remain on track
to meet our revenue and cash balance guidance for the year,” said
“During the quarter, we repurchased some of our PIK Toggle Notes, lowering our debt by 10 percent and reducing interest costs. In addition, we launched a program to increase efficiencies across our business and to align our corporate structure with the scale of our ongoing operations. While we recognize it will take some time before our efforts are fully reflected in our financial results, we are continuing to make progress and are committed to delivering value to our stakeholders.”
Revenue, Cost of Sales and Gross Profit
Revenue for the second quarter was
For the LEU segment, revenue for the second quarter was
The volume of SWU sales increased 63 percent in the second quarter and decreased 13 percent for the six-month period compared to the corresponding periods in 2015. The variation in SWU sales volumes reflects the timing of utility customer orders. For the full year 2016, the SWU sales volume is expected to be comparable to full year 2015.
In the contract services segment, revenues and cost of sales also
decreased in the three and six month periods ending on
Advanced Technology Costs, American Centrifuge Demobilization and D&D
Advanced technology costs consist of American Centrifuge expenses that
are outside of Centrus’ contracts with UT-Battelle, including certain
site maintenance costs. Advanced technology costs in the six months
ended
Centrus has previously provided financial assurance to the NRC and DOE
for D&D and lease turnover costs in the form of surety bonds of
approximately
SG&A and Special Charges
Selling, general and administrative (SG&A) expenses increased
In the second quarter of 2016, the Company commenced a project to align
its corporate structure to the scale of its ongoing business operations
and to update related information technology. Centrus incurred advisory
costs related to the reengineering project of
PIK Toggle Note Repurchase
In
Cash Flow
The net reduction of
2016 Outlook
Centrus continues to anticipate SWU and uranium revenue in 2016 in a
range of
Centrus’ financial guidance is subject to a number of assumptions and uncertainties that could affect results either positively or negatively. Variations from the Company’s expectations could cause differences between its guidance and its ultimate results. Factors that could affect Centrus’ results include the following:
- Additional short-term purchases or sales of SWU and uranium;
- Timing of customer orders, related deliveries, and purchases of LEU or components;
-
The outcome of legal proceedings and other contingencies, including
discussions with the
Pension Benefit Guaranty Corporation (PBGC); -
Execution and funding of a new agreement with UT-Battelle, the
operator of ORNL, for the continuation of American Centrifuge
development and testing activities in Oak Ridge following the
expiration of the current agreement on
September 30, 2016 ; and -
Additional costs for American Centrifuge demobilization;
decontamination and decommissioning of the Company’s facility in
Ohio ; or related to the overall transition of Centrus.
About
Forward-Looking Statements
This news release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934 - that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as “expects”, “anticipates”,
“intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or
“may” and other words of similar meaning. Forward-looking statements by
their nature address matters that are, to different degrees, uncertain.
For
| CENTRUS ENERGY CORP. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue: | ||||||||||||||||
| Separative work units | $ | 54.9 | $ | 42.2 | $ | 114.2 | $ | 145.8 | ||||||||
| Uranium | — | — | 14.3 | 43.2 | ||||||||||||
| Contract services | 8.5 | 21.1 | 24.9 | 42.1 | ||||||||||||
| Total Revenue | 63.4 | 63.3 | 153.4 | 231.1 | ||||||||||||
| Cost of Sales: | ||||||||||||||||
| Separative work units and uranium | 49.3 | 36.7 | 114.8 | 176.3 | ||||||||||||
| Contract services | 8.6 | 22.3 | 17.3 | 43.6 | ||||||||||||
| Total Cost of Sales | 57.9 | 59.0 | 132.1 | 219.9 | ||||||||||||
| Gross profit | 5.5 | 4.3 | 21.3 | 11.2 | ||||||||||||
| Advanced technology costs | 4.7 | 4.0 | 16.7 | 5.8 | ||||||||||||
| Selling, general and administrative | 12.5 | 6.3 | 23.9 | 18.6 | ||||||||||||
| Amortization of intangible assets | 2.7 | 2.0 | 5.9 | 6.0 | ||||||||||||
| Special charges for workforce reductions and advisory costs | 0.6 | 2.9 | 0.6 | 3.5 | ||||||||||||
| Other income | (0.4 | ) | (0.7 | ) | (0.7 | ) | (1.5 | ) | ||||||||
| Operating loss | (14.6 | ) | (10.2 | ) | (25.1 | ) | (21.2 | ) | ||||||||
| Gain on early extinguishment of debt | (16.7 | ) | — | (16.7 | ) | — | ||||||||||
| Interest expense | 5.1 | 4.9 | 10.1 | 9.8 | ||||||||||||
| Interest (income) | (0.1 | ) | — | (0.4 | ) | (0.2 | ) | |||||||||
| Loss before income taxes | (2.9 | ) | (15.1 | ) | (18.1 | ) | (30.8 | ) | ||||||||
| Provision (benefit) for income taxes | — | — | (0.6 | ) | (0.3 | ) | ||||||||||
| Net loss | $ | (2.9 | ) | $ | (15.1 | ) | $ | (17.5 | ) | $ | (30.5 | ) | ||||
| Net loss per share - basic and diluted | $ | (0.32 | ) | $ | (1.68 | ) | $ | (1.92 | ) | $ | (3.39 | ) | ||||
| Weighted-average number of shares outstanding - basic and diluted | 9.1 | 9.0 | 9.1 | 9.0 | ||||||||||||
| CENTRUS ENERGY CORP. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
| (in millions) | ||||||||
|
June 30, 2016 |
December 31, 2015 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 174.5 | $ | 234.0 | ||||
| Accounts receivable | 51.3 | 26.5 | ||||||
| Inventories | 201.2 | 319.2 | ||||||
| Deferred costs associated with deferred revenue | 74.5 | 63.1 | ||||||
| Other current assets | 14.9 | 15.2 | ||||||
| Total current assets | 516.4 | 658.0 | ||||||
| Property, plant and equipment, net | 6.2 | 3.5 | ||||||
| Deposits for surety bonds | 29.5 | 29.8 | ||||||
| Intangible assets, net | 99.9 | 105.8 | ||||||
| Other long-term assets | 23.0 | 23.0 | ||||||
| Total Assets | $ | 675.0 | $ | 820.1 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 40.1 | $ | 44.8 | ||||
| Payables under SWU purchase agreements | 34.5 | 85.4 | ||||||
| Inventories owed to customers and suppliers | 39.5 | 106.8 | ||||||
| Deferred revenue | 99.8 | 83.9 | ||||||
| Decontamination and decommissioning obligations | 25.7 | 29.4 | ||||||
| Total current liabilities | 239.6 | 350.3 | ||||||
| Long-term debt | 227.8 | 247.0 | ||||||
| Postretirement health and life benefit obligations | 185.0 | 184.3 | ||||||
| Pension benefit liabilities | 171.4 | 172.3 | ||||||
| Other long-term liabilities | 34.2 | 31.9 | ||||||
| Total Liabilities | 858.0 | 985.8 | ||||||
| Stockholders’ Deficit | (183.0 | ) | (165.7 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 675.0 | $ | 820.1 | ||||
| CENTRUS ENERGY CORP. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| (in millions) | ||||||||
|
Six Months Ended June 30, |
||||||||
| 2016 | 2015 | |||||||
| Cash From Operating Activities | ||||||||
| Net loss | $ | (17.5 | ) | $ | (30.5 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) operating activities: | ||||||||
| Depreciation and amortization | 6.2 | 6.2 | ||||||
| PIK interest on paid-in-kind toggle notes | 3.4 | 1.8 | ||||||
| Gain on early extinguishment of debt | (16.7 | ) | — | |||||
| Gain on sales of assets | (0.6 | ) | (1.5 | ) | ||||
| Inventory valuation adjustments | 0.7 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable – (increase) decrease | (25.2 | ) | 31.8 | |||||
| Inventories, net – decrease | 50.0 | 118.1 | ||||||
| Payables under SWU purchase agreements – (decrease) | (50.9 | ) | (116.9 | ) | ||||
| Deferred revenue, net of deferred costs – increase (decrease) | 4.4 | (6.6 | ) | |||||
| Accounts payable and other liabilities – (decrease) | (4.3 | ) | (12.7 | ) | ||||
| Other, net | 0.6 | 4.5 | ||||||
| Net Cash (Used in) Operating Activities | (49.9 | ) | (5.8 | ) | ||||
| Cash Provided by Investing Activities | ||||||||
| Capital expenditures | (2.9 | ) | — | |||||
| Proceeds from sales of assets | 1.0 | 1.5 | ||||||
| Deposits for surety bonds - net decrease | 0.3 | 4.0 | ||||||
| Net Cash Provided by (Used in) Investing Activities | (1.6 | ) | 5.5 | |||||
| Cash Used in Financing Activities | ||||||||
| Repurchase of debt | (8.0 | ) | — | |||||
| Net Cash (Used in) Financing Activities | (8.0 | ) | — | |||||
| Net (Decrease) | (59.5 | ) | (0.3 | ) | ||||
| Cash and Cash Equivalents at Beginning of Period | 234.0 | 218.8 | ||||||
| Cash and Cash Equivalents at End of Period | $ | 174.5 | $ | 218.5 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | 3.6 | $ | 6.0 | ||||
| Non-cash activities: | ||||||||
| Conversion of interest payable-in-kind to long-term debt | $ | 3.4 | $ | 1.8 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160810006123/en/
Source:
Centrus Energy Corp.
Investors:
Don Hatcher, 301-564-3460
or
Media:
Jeremy
Derryberry, 301-564-3392