BETHESDA, Md.--(BUSINESS WIRE)--Jan. 22, 2007--USEC Inc. (NYSE:USU) today updated its 2006 revenue and earnings guidance and provided a year-end cash balance.
USEC expects full-year revenue to total approximately $1.85 billion and a gross profit margin of approximately 18 percent. Net income for 2006 is expected to be approximately $105 million, which is an increase over the previous net income guidance of $65 to $75 million. The revised 2006 guidance is based on preliminary results that are subject to audit.
The main drivers for the improvement in earnings compared to previous guidance are higher uranium prices realized in contracts with market price adjustments; higher gross margin for SWU, as the average price billed to customers was higher and cost of sales was lower than expected; and the timing of expenditures for the American Centrifuge project. This net income reflects expense for the American Centrifuge project in 2006 of approximately $103 million.
USEC ended the year with a cash balance of approximately $170 million. The Company had no short-term borrowing on its bank credit facility beyond letters of credit for financial assurance requirements.
"Our strong 2006 financial results reflect improving market conditions for nuclear fuel and cost-cutting actions taken by USEC management in recent years," said John K. Welch, USEC president and chief executive officer.
"Nonetheless, we know that only a few months of the substantial increase in our electric power costs in 2006 are now reflected in our cost of sales, and we face tremendous financial challenges in 2007 and beyond. We are taking steps to attempt to partially mitigate the higher power costs, but we know our profit margins will be under significant pressure in upcoming quarters," Welch said.
USEC expects to release its fourth quarter and full-year 2006 earnings in late February, and the Company will provide earnings and cash flow guidance for 2007 at that time.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.
This document contains "forward-looking statements" - that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "will" and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For USEC, particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include, but are not limited to: the cost of electric power used at our gaseous diffusion plant; our dependence on deliveries under the Russian Contract and on a single production facility; the success and timing of the demonstration and deployment of the American Centrifuge technology and the costs to develop that technology; difficulties in obtaining financing; changes in existing restrictions on imports of Russian enriched uranium; the elimination of duties charged on imports of foreign-produced low enriched uranium; pricing trends in the uranium and enrichment markets; changes to, or termination of, our contracts with the U.S. government and changes in U.S. government priorities and the availability of government funding; the impact of government regulation; the outcome of legal proceedings and other contingencies (including lawsuits, government investigations or audits and government/regulatory and environmental remediation efforts); the competitive environment for our products and services; changes in the nuclear energy industry; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequent quarterly Form 10-Qs. We do not undertake to update our forward-looking statements except as required by law.
CONTACT: USEC Inc.
Media: Elizabeth Stuckle, 301-564-3399
Investors: Steven Wingfield, 301-564-3354
SOURCE: USEC Inc.