The Paducah plant has continued to ship its enriched uranium product to the Portsmouth plant although USEC ceased enrichment at the Portsmouth plant in May 2001. The enriched uranium is transferred into transportation cylinders at Portsmouth and prepared for shipping to fuel fabricators.
"We are taking this action to improve our operational efficiency," said Morris Brown, vice president, operations. "The Paducah plant is being modified to make it capable of shipping product directly to fuel fabricators. Consolidating these operations at Paducah will provide significant cost savings."
Brown said, "USEC is committed to remaining the world's leading supplier of enriched uranium fuel. Improving our operational efficiency will help us to ensure the self-sufficiency of domestic uranium enrichment and to successfully compete in a global market."
The $40 million net cost reduction will be achieved through a work force reduction and lower overhead, utilities and materials costs. It is currently estimated that this action will require $29 million for capital improvements and training at Paducah, and severance and other benefits for Portsmouth employees based on current company policy and labor contract requirements. The Company is reevaluating the various special restructuring charges previously accrued in June 2000, and currently anticipates that there will be no new net charges as a result of this action.
"We regret the impact this action may have on our Portsmouth employees, but it is a necessary action to lower our operating costs," said Brown. "We will work with the PACE union concerning this action."
The consolidation of the transfer and shipping operations is scheduled to begin in April 2002 and is expected to be completed this summer. The consolidation will result in the elimination of approximately 440 positions out of a total of approximately 1,350 Portsmouth positions over the course of about six months beginning in June 2002. The consolidation will create 30 to 50 new positions at the Paducah plant.
This news release includes certain forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainty, including certain assumptions regarding the future performance of the Company. Actual results and trends may differ materially depending upon a variety of factors, including, without limitation, market demand for the Company's services, pricing trends in the uranium and the enrichment markets, deliveries and costs under the Russian contract, the availability and cost of electric power, the Company's ability to successfully execute its internal performance plans, the refueling cycles of the Company's customers, and the impact of any government regulation. Additional information regarding the foregoing factors is contained in the Company's filings with the Securities and Exchange Commission.
USEC Inc. is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants. A global energy company, USEC has its headquarters in Bethesda, Md.
CONTACT: USEC Inc., Bethesda
Elizabeth Stuckle, 301/564-3399
or
Charles Yulish, 301/564-3391
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