USEC REPORTS LOSS FOR THIRD QUARTER, WARNS OF LIQUIDITY CONCERNS IN 2014

USEC yesterday reported a net loss of $44.3 million for the third quarter of this year, compared with a net income of $4.5 million for the same quarter last year. The company attributed the loss to “a reduction in separative work unit (SWU) revenue and lower gross profit primarily due to non-production costs related to the transition of the Paducah Gaseous Diffusion Plant (GDP) compared to the same periods of 2012.” In a release yesterday, USEC President and CEO John Welch said, ““Although we reported a net loss and a negative gross profit margin, this was largely due to the significant amount of non-production expenses related to the transition of the Paducah GDP.” He added,  “Without those substantial expenses, we would have reported a gross profit for the quarter and year to date.”

USEC also warned that its prospects for adequate liquidity next year are “uncertain.” The company release says, “Our liquidity is dependent on a number of factors, including (i) USEC’s operating needs; (ii) the level of expenditures for the American Centrifuge project (ACP), including the availability of any additional government funding of the ACP after the conclusion of the RD&D program, which is scheduled to be completed by December 31, 2013, and potential demobilization or termination costs if post-RD&D funding is not available or if USEC determines there is no longer a viable path to commercialization of the ACP; (iii) the amount and timing of transition expenses for the Paducah GDP and USEC’s ability to reach an acceptable agreement with DOE for the transition; and (iv) USEC’s ability to restructure its $530.0 million of convertible senior notes that mature on October 1, 2014, all of which impact USEC’s liquidity.”