USEC reported a net loss of $28.8 million for the first quarter of 2012, largely as a result of expenses related to a research, development and deployment program for the American Centrifuge project proposed by the Department of Energy. However, the company did report an increase in separative work unit revenue and a 179 percent increase in overall gross profit when compared to the same quarter in 2011. “Although we recorded a net loss in the first quarter, we are pleased to report higher revenue, a higher gross profit and gross profit margin, and positive cash flow from operations in the quarter compared to the first quarter of 2011,” USEC CEO John Welch said in a statement. But Congress has yet to approve DOE spending on the enrichment plant R&D program, and Welch warned that time is running for that project. “Our credit facility severely limits spending on the American Centrifuge project after May 31 unless we have federal RD&D funding in place. That means we need action this month, or we will be forced to demobilize the project,” he said.
Welch did sound an optimistic note on the future of operations at Paducah, given the progression of discussions between the Tennessee Valley Authority, Energy Northwest, DOE and USEC on a tails re-enrichment program that could keep the plant running. USEC has said it will shut down the plant if it does not have sufficient demand for continued operations by the end of this month. “We continue to be in discussions regarding a multi-party arrangement to produce U.S.-origin low enriched uranium by enriching a portion of DOE’s depleted uranium tails inventory at Paducah. If we are successful, we expect the agreement to support operating Paducah for another year through May 31, 2013, as we work with DOE on the longer term transition plan for the plant,” he said. “However, as with any transaction, a deal is not final until all approvals have been provided and final agreements signed.” The company is scheduled to hold a call with shareholders this morning at 8:30, which will be broadcast here.