Kenneth Fletcher
RW Monitor
11/21/2014
Centrus Energy is looking at further corporate downsizing as its focuses on the American Centrifuge project and its uranium broker business, executives said in an investor call late last week. The shift comes after last month Centrus returned control of the Paducah Gaseous Diffusion Plant to the Department of Energy. “We have over the past couple of years highlighted the need to be adjusting our corporate size and processes as the company has changed. As our businesses continue to change we continue to undertake that,” Centrus Chief Financial Officer John Barpoulis said in the Nov. 14 third quarter earnings call. “As a result of the Paducah transition, you will also see a significant reduction in total head count across all sites. That again, very much a result in the change in our business. We had many processes that were finely honed for operating a gaseous diffusion plant at a corporate level. Again, now that our business is transitioning with a focus on American Centrifuge and our and LEU broker business we are adapting the corporate structure to adapt to those business circumstances.”
Centrus last week reported its first earnings since completing Chapter 11 bankruptcy restructuring Sept. 30 and changing its name from USEC. It reported a net income of about $419 million for the third quarter of 2014 compared to a net loss of $44.3 million the same quarter last year. The company filed for Chapter 11 bankruptcy in March in an effort to replace $530 million in debt that would have largely come due in October. At the end of September, USEC became Centrus Energy and its debt and preferred stock were replaced by $240.4 million in debt and new common stock. Creditors received $200 million in new debt and 79 percent in common stock, while preferred investors Toshiba and B&W each received $20.19 million of the new debt and about 8 percent of the new common stock.
CEO Search Continues
The company has also continued its search for a new CEO since previous chief John Welch stepped down last month after the company completed its restructuring. Welch, who had served as head of the uranium enrichment firm since October 2005, left the company on Oct. 17. The Centrus Board of Directors has launched its selection process for a new CEO using executive search firm Spencer Stuart, while in the meantime Chief Restructuring Officer John Castellano is serving as interim president and CEO.
Castellano told investors last week: “The Board is seeking an outstanding and visionary leader with the necessary credibility and professional experience required to grow and diversify revenues and increase shareholder value. Ideally we are seeking someone with relevant experience in the nuclear industry who has experience dealing with the U.S. government so that they have proven credibility with key decision makers in the highest levels of government.” He added, “We are also looking for a leader with a proven track record of managing complex businesses and delivering financial results in a competitive market. We are looking at both internal and external candidates and I believe that the Centrus board will have an excellent pool from which to select our next chief executive.”
