2019 Summary:
Financial Results
- Total revenues of
$209.7 million , separative work units (SWU) and uranium revenue of$169.4 million , and year-end cash balance of$130.7 million , in line with prior guidance - Repaid the
$27.5 million principal balance in outstanding 8.0% notes that matured onSeptember 30, 2019 - Gross profit of
$32.5 million and net loss of$16.5 million
Commercial Highlights
- Order book at
$1.0 billion as ofDecember 31, 2019 - Signed three-year,
$115 million cost-share contract withU.S. Department of Energy to demonstrate production of High-Assay, Low-Enriched Uranium (HALEU) for advanced reactors - Successfully completed decontamination and decommissioning of
DOE's K-1600 facility at theEast Tennessee Technology Park
"With lower cost of sales in our LEU segment and reduced overhead, we improved our performance significantly in 2019," said
Financial Results
For the full year, the Company reported a net loss of
Revenue from the LEU segment increased
Cost of sales for the LEU segment declined
Revenue from the technical solutions segment increased
Advanced technology costs declined
Selling, General and Administrative
SG&A expenses declined
Nonoperating Components of Net Periodic Benefit Expense (Income)
Nonoperating components of net periodic benefit expense (income) related to the Company's retiree benefit plans include the net of actuarial gains and losses recognized each year in the fourth quarter.
2020 Outlook
On
Conference Call
About
With world-class technical capabilities,
Forward-Looking Statements
This Annual Report on Form 10-K, including Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. In this context, forward-looking statements mean statements related to future events, 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
For a discussion of these risks and uncertainties and other factors that may affect our future results, please see Part I, Item 1A, Risk Factors, and the other sections of this Annual Report on Form 10-K. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this report and in our other filings with the
Contacts:
Investors:
Media:
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in millions, except share and per share data) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenue: |
|||||||||||||||
Separative work units |
$ |
36.3 |
$ |
62.4 |
$ |
123.7 |
$ |
130.6 |
|||||||
Uranium |
7.6 |
18.9 |
45.7 |
33.8 |
|||||||||||
Technical solutions |
11.8 |
2.5 |
40.3 |
28.6 |
|||||||||||
Total revenue |
55.7 |
83.8 |
209.7 |
193.0 |
|||||||||||
Cost of Sales: |
|||||||||||||||
Separative work units and uranium |
18.2 |
89.1 |
118.6 |
187.7 |
|||||||||||
Technical solutions |
30.7 |
4.4 |
58.6 |
23.2 |
|||||||||||
Total cost of sales |
48.9 |
93.5 |
177.2 |
210.9 |
|||||||||||
Gross profit (loss) |
6.8 |
(9.7) |
32.5 |
(17.9) |
|||||||||||
Advanced technology costs |
1.6 |
6.9 |
14.6 |
26.1 |
|||||||||||
Selling, general and administrative |
9.2 |
10.2 |
33.7 |
39.9 |
|||||||||||
Amortization of intangible assets |
2.4 |
2.1 |
6.5 |
6.6 |
|||||||||||
Special charges (credits) for workforce reductions and advisory costs |
0.3 |
0.7 |
(1.9) |
2.2 |
|||||||||||
Gain on sales of assets |
— |
— |
(0.7) |
(0.3) |
|||||||||||
Operating loss |
(6.7) |
(29.6) |
(19.7) |
(92.4) |
|||||||||||
Gain on early extinguishment of debt |
— |
(0.5) |
— |
(0.5) |
|||||||||||
Nonoperating components of net periodic benefit expense (income) |
(4.1) |
15.5 |
(4.3) |
10.6 |
|||||||||||
Interest expense |
0.1 |
1.1 |
3.0 |
4.1 |
|||||||||||
Investment income |
(0.3) |
(0.6) |
(2.2) |
(2.5) |
|||||||||||
Loss before income taxes |
(2.4) |
(45.1) |
(16.2) |
(104.1) |
|||||||||||
Income tax expense |
0.4 |
0.1 |
0.3 |
— |
|||||||||||
Net loss and comprehensive loss |
(2.8) |
(45.2) |
(16.5) |
(104.1) |
|||||||||||
Preferred stock dividends - undeclared and cumulative |
1.9 |
2.0 |
7.8 |
7.8 |
|||||||||||
Net loss allocable to common stockholders |
$ |
(4.7) |
$ |
(47.2) |
$ |
(24.3) |
$ |
(111.9) |
|||||||
Net loss per common share - basic and diluted |
$ |
(0.49) |
$ |
(5.10) |
$ |
(2.54) |
$ |
(12.23) |
|||||||
Average number of common shares outstanding - basic and diluted (in |
9,583 |
9,246 |
9,566 |
9,151 |
CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) |
|||||||
|
|||||||
2019 |
2018 |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
130.7 |
$ |
123.1 |
|||
Accounts receivable |
21.1 |
60.2 |
|||||
Inventories |
64.5 |
129.7 |
|||||
Deferred costs associated with deferred revenue |
144.1 |
134.9 |
|||||
Deposits for financial assurance |
0.2 |
30.3 |
|||||
Other current assets |
9.0 |
6.3 |
|||||
Total current assets |
369.6 |
484.5 |
|||||
Property, plant and equipment, net |
3.7 |
4.2 |
|||||
Deposits for financial assurance |
5.7 |
6.3 |
|||||
Intangible assets, net |
69.5 |
76.0 |
|||||
Other long-term assets |
7.4 |
0.7 |
|||||
Total assets |
$ |
455.9 |
$ |
571.7 |
|||
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued liabilities |
$ |
50.7 |
$ |
52.4 |
|||
Payables under SWU purchase agreements |
8.1 |
46.0 |
|||||
Inventories owed to customers and suppliers |
5.6 |
103.0 |
|||||
Deferred revenue and advances from customers |
266.3 |
204.5 |
|||||
Current debt |
6.1 |
32.8 |
|||||
Total current liabilities |
336.8 |
438.7 |
|||||
Long-term debt |
114.1 |
120.2 |
|||||
Postretirement health and life benefit obligations |
138.6 |
136.2 |
|||||
Pension benefit liabilities |
141.8 |
168.9 |
|||||
Advances from customers |
29.4 |
15.0 |
|||||
Other long-term liabilities |
32.1 |
14.6 |
|||||
Total liabilities |
792.8 |
893.6 |
|||||
Stockholders' deficit: |
|||||||
Preferred stock, par value |
|||||||
Series A Participating Cumulative Preferred Stock, none issued |
— |
— |
|||||
Series B Senior Preferred Stock, 7.5% cumulative, 104,574 shares issued and outstanding and |
4.6 |
4.6 |
|||||
Class A Common Stock, par value |
0.8 |
0.8 |
|||||
Class B Common Stock, par value |
0.1 |
0.1 |
|||||
Excess of capital over par value |
61.5 |
61.2 |
|||||
Accumulated deficit |
(405.0) |
(388.5) |
|||||
Accumulated other comprehensive income, net of tax |
1.1 |
(0.1) |
|||||
Total stockholders' deficit |
(336.9) |
(321.9) |
|||||
Total liabilities and stockholders' deficit |
$ |
455.9 |
$ |
571.7 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in millions) |
Year Ended December 31, |
||||||
2019 |
2018 |
||||||
OPERATING |
|||||||
Net loss |
$ |
(16.5) |
$ |
(104.1) |
|||
Adjustments to reconcile net loss to cash used in operating activities: |
|||||||
Depreciation and amortization |
7.0 |
7.4 |
|||||
Accrued loss on long-term contract |
18.3 |
— |
|||||
Immediate recognition of retirement benefit plans (gains) losses, net |
(4.0) |
17.3 |
|||||
PIK interest on paid-in-kind toggle notes |
1.1 |
1.7 |
|||||
Gain on early extinguishment of debt |
— |
(0.5) |
|||||
Gain on sales of assets |
(0.7) |
(0.4) |
|||||
Inventory valuation adjustments |
2.3 |
— |
|||||
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
29.3 |
9.7 |
|||||
Inventories, net |
0.1 |
61.0 |
|||||
Payables under SWU purchase agreements |
(37.9) |
(33.4) |
|||||
Deferred revenue and advances from customers, net of deferred costs |
44.0 |
0.1 |
|||||
Accounts payable and other liabilities |
(12.3) |
3.7 |
|||||
Pension and postretirement liabilities |
(19.5) |
(28.0) |
|||||
Other, net |
0.1 |
(8.9) |
|||||
Cash provided by (used in) operating activities |
11.3 |
(74.4) |
|||||
INVESTING |
|||||||
Capital expenditures |
(0.1) |
(0.1) |
|||||
Proceeds from sales of assets |
0.7 |
0.5 |
|||||
Cash provided by investing activities |
0.6 |
0.4 |
|||||
FINANCING |
|||||||
Principal payments on debt |
(27.5) |
(5.0) |
|||||
Payments for deferred financing costs |
(1.4) |
— |
|||||
Payment of interest classified as debt |
(6.1) |
(6.1) |
|||||
Cash used in financing activities |
(35.0) |
(11.1) |
|||||
Decrease in cash, cash equivalents and restricted cash |
(23.1) |
(85.1) |
|||||
Cash, cash equivalents and restricted cash, beginning of period |
159.7 |
244.8 |
|||||
Cash, cash equivalents and restricted cash, end of period |
$ |
136.6 |
$ |
159.7 |
|||
Supplemental cash flow information: |
|||||||
Interest paid in cash |
$ |
1.5 |
$ |
7.1 |
|||
Non-cash activities: |
|||||||
Conversion of interest payable-in-kind to debt |
$ |
0.7 |
$ |
1.7 |
|||
Deferred financing costs included in accounts payable and accrued liabilities |
$ |
0.8 |
$ |
— |
|||
Additional right of use operating lease assets recorded |
$ |
5.2 |
$ |
— |
|||
Disposal of right of use operating lease assets for early termination |
$ |
0.4 |
$ |
— |
|||
Exchange of debt for Class A common stock |
$ |
— |
$ |
0.9 |
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