BETHESDA, Md.--(BUSINESS WIRE)--Nov. 6, 2002--The shareholders of USEC Inc. (NYSE:USU) today elected members of the Board of Directors to a one-year term, affirmed the selection of PricewaterhouseCoopers LLP as auditors for fiscal year 2003 and heard updates on the Company's progress in deploying advanced uranium enrichment technology.
Chairman James R. Mellor reviewed USEC's accomplishments during fiscal 2002 and said, "These events add up to a year of significant achievements." Wall Street has been watching and evaluating the Company's success, Mellor said, and has rewarded shareholders with total returns that have been positive over the past fiscal year while stock market indices have fallen by double-digit percentages.
Turning to corporate governance, Mellor said USEC is well ahead of the curve in complying with new laws and Securities and Exchange Commission rules as the Company has implemented many of the best practices since its privatization in 1998. With only one executive officer serving as a director, the Board is independent of management, Mellor said. The key committees of Audit, Nominating and Governance, and Compensation are comprised entirely of independent directors.
"Others have noticed our strong corporate governance practices," Mellor noted. Institutional Shareholder Services (ISS), a well-recognized adviser to over 700 institutional shareholders, has begun rating the strength of corporate governance for the 3000 largest public companies in the United States. In its recent report on USEC, the firm found that USEC had outperformed 94.4 percent of the companies included in the Russell 3000 index.
"That's a ringing endorsement of the practices we put into place for USEC," Mellor said.
Regarding USEC's future, President and CEO William H. Timbers said, "We have fixed the core business and have moved swiftly to the next phase of our business plan where we will deploy the world's best uranium enrichment technology, and grow and diversify our Company."
While it would not be prudent to publicly discuss potential business plans, "I can assure you that we will evaluate each opportunity carefully to determine its fit with other strategic interests, its return on investment and its ability to be accretive to earnings quickly. Our goal is to increase revenue, grow net income and improve return on equity over the next five years," Timbers said.
USEC has taken a number of concrete actions in recent months to implement its plan for deploying advanced uranium enrichment technology by the end of the decade. In June, the Company signed an agreement with the U.S. Department of Energy that gives USEC the right to develop and deploy U.S. centrifuge technology. More recently, a Cooperative Research and Development Agreement was signed that facilitates continued work with scientists and engineers responsible for the successful development of earlier U.S. centrifuges. A key component of the centrifuge machine has been manufactured and hardware testing will begin in early 2003.
Timbers said USEC tripled its advanced technology staff last year, will triple it again in the current fiscal year and anticipates spending about $150 million over the next five years. "We are very serious about our commitment to this project," he said.
The next step will be the selection of a site for the lead cascade facility. Kentucky and Ohio have submitted proposals offering economic development incentives to locate the lead cascade in their states. The lead cascade will demonstrate the basic building block of a commercial enrichment plant and showcase improvements USEC has made to the already proven U.S. centrifuge technology.
Timbers said that demonstrating the efficiency of the updated technology would help USEC find partners and financing options for building the commercial plant, which is expected to cost between $1 billion and $1.5 billion. "We are optimistic that we will attract capital by demonstrating a highly efficient, low-cost uranium enrichment technology through a lead cascade demonstration," he said.
In concluding his remarks, Timbers said, "We're excited about the progress we've made over the past several years. We are committed to maintaining our long-term global leadership in the nuclear industry. We have valued customers, a strong relationship with the U.S. government and an excellent business relationship with our Russian counterparts. We are focused on successfully deploying new advanced gas centrifuges on schedule and on budget so that we will be the low-cost producer by the end of the decade."
The prepared remarks of Mellor and Timbers are available on the USEC website in the News Room section. The website is located at www.usec.com.
This news release contains forward-looking information that involves risks and uncertainty, including certain assumptions regarding the future performance of USEC. Actual results and trends may differ materially depending upon a variety of factors, including, without limitation, market demand for USEC's products, pricing trends in the uranium and enrichment markets, deliveries under the Russian Contract, the availability and cost of electric power, implementing agreements with DOE regarding uranium inventory remediation and the use of advanced technology and facilities, satisfactory performance of the technology at various stages of demonstration, USEC's ability to successfully execute its internal performance plans, the refueling cycles of USEC's customers, the outcome of litigation, and the impact of any government regulation. Revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year.
USEC Inc., a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants.
CONTACT:
USEC Inc.
Charles Yulish (301) 564-3391
Steven Wingfield (301) 564-3354
USEC website: www.usec.com