|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
52-2107911
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
o
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Non-accelerated filer
|
o
|
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Smaller reporting company
|
ý
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|
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Page
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PART I – FINANCIAL INFORMATION
|
|
|
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||
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||
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||
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PART II – OTHER INFORMATION
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
174.5
|
|
|
$
|
234.0
|
|
Accounts receivable
|
51.3
|
|
|
26.5
|
|
||
Inventories
|
201.2
|
|
|
319.2
|
|
||
Deferred costs associated with deferred revenue
|
74.5
|
|
|
63.1
|
|
||
Other current assets
|
14.9
|
|
|
15.2
|
|
||
Total current assets
|
516.4
|
|
|
658.0
|
|
||
Property, plant and equipment, net
|
6.2
|
|
|
3.5
|
|
||
Deposits for surety bonds
|
29.5
|
|
|
29.8
|
|
||
Intangible assets, net
|
99.9
|
|
|
105.8
|
|
||
Other long-term assets
|
23.0
|
|
|
23.0
|
|
||
Total Assets
|
$
|
675.0
|
|
|
$
|
820.1
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
40.1
|
|
|
$
|
44.8
|
|
Payables under SWU purchase agreements
|
34.5
|
|
|
85.4
|
|
||
Inventories owed to customers and suppliers
|
39.5
|
|
|
106.8
|
|
||
Deferred revenue
|
99.8
|
|
|
83.9
|
|
||
Decontamination and decommissioning obligations
|
25.7
|
|
|
29.4
|
|
||
Total current liabilities
|
239.6
|
|
|
350.3
|
|
||
Long-term debt
|
227.8
|
|
|
247.0
|
|
||
Postretirement health and life benefit obligations
|
185.0
|
|
|
184.3
|
|
||
Pension benefit liabilities
|
171.4
|
|
|
172.3
|
|
||
Other long-term liabilities
|
34.2
|
|
|
31.9
|
|
||
Total Liabilities
|
858.0
|
|
|
985.8
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
|
|
||
Stockholders’ Deficit
|
(183.0
|
)
|
|
(165.7
|
)
|
||
Total Liabilities and Stockholders’ Deficit
|
$
|
675.0
|
|
|
$
|
820.1
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Separative work units
|
$
|
54.9
|
|
|
$
|
42.2
|
|
|
$
|
114.2
|
|
|
$
|
145.8
|
|
Uranium
|
—
|
|
|
—
|
|
|
14.3
|
|
|
43.2
|
|
||||
Contract services
|
8.5
|
|
|
21.1
|
|
|
24.9
|
|
|
42.1
|
|
||||
Total Revenue
|
63.4
|
|
|
63.3
|
|
|
153.4
|
|
|
231.1
|
|
||||
Cost of Sales:
|
|
|
|
|
|
|
|
||||||||
Separative work units and uranium
|
49.3
|
|
|
36.7
|
|
|
114.8
|
|
|
176.3
|
|
||||
Contract services
|
8.6
|
|
|
22.3
|
|
|
17.3
|
|
|
43.6
|
|
||||
Total Cost of Sales
|
57.9
|
|
|
59.0
|
|
|
132.1
|
|
|
219.9
|
|
||||
Gross profit
|
5.5
|
|
|
4.3
|
|
|
21.3
|
|
|
11.2
|
|
||||
Advanced technology costs
|
4.7
|
|
|
4.0
|
|
|
16.7
|
|
|
5.8
|
|
||||
Selling, general and administrative
|
12.5
|
|
|
6.3
|
|
|
23.9
|
|
|
18.6
|
|
||||
Amortization of intangible assets
|
2.7
|
|
|
2.0
|
|
|
5.9
|
|
|
6.0
|
|
||||
Special charges for workforce reductions and advisory costs
|
0.6
|
|
|
2.9
|
|
|
0.6
|
|
|
3.5
|
|
||||
Other income
|
(0.4
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
(1.5
|
)
|
||||
Operating loss
|
(14.6
|
)
|
|
(10.2
|
)
|
|
(25.1
|
)
|
|
(21.2
|
)
|
||||
Gain on early extinguishment of debt
|
(16.7
|
)
|
|
—
|
|
|
(16.7
|
)
|
|
—
|
|
||||
Interest expense
|
5.1
|
|
|
4.9
|
|
|
10.1
|
|
|
9.8
|
|
||||
Interest (income)
|
(0.1
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(0.2
|
)
|
||||
Loss before income taxes
|
(2.9
|
)
|
|
(15.1
|
)
|
|
(18.1
|
)
|
|
(30.8
|
)
|
||||
Provision (benefit) for income taxes
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.3
|
)
|
||||
Net loss
|
$
|
(2.9
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(30.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic and diluted
|
$
|
(0.32
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.92
|
)
|
|
$
|
(3.39
|
)
|
Weighted-average number of shares outstanding - basic and diluted
|
9.1
|
|
|
9.0
|
|
|
9.1
|
|
|
9.0
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
$
|
(2.9
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(30.5
|
)
|
Other comprehensive loss, before tax (Note 13):
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service (credits), net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Other comprehensive loss, before tax
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Income tax benefit related to items of other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Comprehensive loss
|
$
|
(2.9
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
(17.6
|
)
|
|
$
|
(30.6
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Cash From Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(17.5
|
)
|
|
$
|
(30.5
|
)
|
Adjustments to reconcile net loss to net cash (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6.2
|
|
|
6.2
|
|
||
PIK interest on paid-in-kind toggle notes
|
3.4
|
|
|
1.8
|
|
||
Gain on early extinguishment of debt
|
(16.7
|
)
|
|
—
|
|
||
Gain on sales of assets
|
(0.6
|
)
|
|
(1.5
|
)
|
||
Inventory valuation adjustments
|
0.7
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable – (increase) decrease
|
(25.2
|
)
|
|
31.8
|
|
||
Inventories, net – decrease
|
50.0
|
|
|
118.1
|
|
||
Payables under SWU purchase agreements – (decrease)
|
(50.9
|
)
|
|
(116.9
|
)
|
||
Deferred revenue, net of deferred costs – increase (decrease)
|
4.4
|
|
|
(6.6
|
)
|
||
Accounts payable and other liabilities – (decrease)
|
(4.3
|
)
|
|
(12.7
|
)
|
||
Other, net
|
0.6
|
|
|
4.5
|
|
||
Net Cash (Used in) Operating Activities
|
(49.9
|
)
|
|
(5.8
|
)
|
||
|
|
|
|
||||
Cash Provided by Investing Activities
|
|
|
|
||||
Capital expenditures
|
(2.9
|
)
|
|
—
|
|
||
Proceeds from sales of assets
|
1.0
|
|
|
1.5
|
|
||
Deposits for surety bonds - net decrease
|
0.3
|
|
|
4.0
|
|
||
Net Cash Provided by (Used in) Investing Activities
|
(1.6
|
)
|
|
5.5
|
|
||
|
|
|
|
||||
Cash Used in Financing Activities
|
|
|
|
||||
Repurchase of debt
|
(8.0
|
)
|
|
—
|
|
||
Net Cash (Used in) Financing Activities
|
(8.0
|
)
|
|
—
|
|
||
|
|
|
|
||||
Net (Decrease)
|
(59.5
|
)
|
|
(0.3
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
234.0
|
|
|
218.8
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
174.5
|
|
|
$
|
218.5
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
3.6
|
|
|
$
|
6.0
|
|
Non-cash activities:
|
|
|
|
||||
Conversion of interest payable-in-kind to long-term debt
|
$
|
3.4
|
|
|
$
|
1.8
|
|
|
Common Stock,
Par Value
$.10 per Share
|
|
Excess of
Capital over
Par Value
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
Total
|
||||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2014
|
$
|
0.9
|
|
|
$
|
58.6
|
|
|
$
|
(42.3
|
)
|
|
$
|
4.4
|
|
|
$
|
21.6
|
|
Net loss
|
—
|
|
|
—
|
|
|
(30.5
|
)
|
|
—
|
|
|
(30.5
|
)
|
|||||
Other comprehensive loss, net of tax (Note 13)
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Restricted stock units and stock options issued, net of amortization
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Balance at June 30, 2015
|
$
|
0.9
|
|
|
$
|
58.8
|
|
|
$
|
(72.8
|
)
|
|
$
|
4.3
|
|
|
$
|
(8.8
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2015
|
$
|
0.9
|
|
|
$
|
59.0
|
|
|
$
|
(229.7
|
)
|
|
$
|
4.1
|
|
|
$
|
(165.7
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
(17.5
|
)
|
|
—
|
|
|
(17.5
|
)
|
|||||
Other comprehensive loss, net of tax (Note 13)
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Restricted stock units and stock options issued, net of amortization
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Balance at June 30, 2016
|
$
|
0.9
|
|
|
$
|
59.3
|
|
|
$
|
(247.2
|
)
|
|
$
|
4.0
|
|
|
$
|
(183.0
|
)
|
|
|
Liability
Dec. 31,
2015
|
|
Six Months Ended
June 30, 2016
|
|
Liability
June 30,
2016
|
|
||||||||||
|
|
|
Charges for Termination Benefits
|
|
Paid
|
|
|
||||||||||
Workforce reductions:
|
|
|
|
|
|
|
|
|
|
||||||||
Enrichment cessation and evolving business needs
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
|
American Centrifuge
|
|
8.4
|
|
|
0.1
|
|
|
(2.2
|
)
|
|
6.3
|
|
|
||||
|
|
$
|
8.7
|
|
|
$
|
0.1
|
|
|
$
|
(2.3
|
)
|
|
$
|
6.5
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
(in millions)
|
||||||
Utility customers and other
|
$
|
46.8
|
|
|
$
|
24.7
|
|
Contract services, primarily DOE
|
4.5
|
|
|
1.8
|
|
||
Accounts receivable
|
$
|
51.3
|
|
|
$
|
26.5
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Current
Assets
|
|
Current
Liabilities
(a)
|
|
Inventories, Net
|
|
Current
Assets
|
|
Current
Liabilities
(a)
|
|
Inventories, Net
|
||||||||||||
Separative work units
|
$
|
159.8
|
|
|
$
|
18.5
|
|
|
$
|
141.3
|
|
|
$
|
221.5
|
|
|
$
|
33.1
|
|
|
$
|
188.4
|
|
Uranium
|
41.2
|
|
|
21.0
|
|
|
20.2
|
|
|
97.5
|
|
|
73.7
|
|
|
23.8
|
|
||||||
Materials and supplies
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
|
$
|
201.2
|
|
|
$
|
39.5
|
|
|
$
|
161.7
|
|
|
$
|
319.2
|
|
|
$
|
106.8
|
|
|
$
|
212.4
|
|
(a)
|
Inventories owed to customers and suppliers, included in current liabilities, consist primarily of SWU and uranium inventories owed to fabricators.
|
|
December 31,
2015 |
|
Additions / (Depreciation)
|
|
Retirements
|
|
June 30,
2016 |
||||||||
Land
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
Leasehold improvements
|
0.9
|
|
|
2.2
|
|
|
(0.2
|
)
|
|
2.9
|
|
||||
Machinery and equipment
|
1.6
|
|
|
0.1
|
|
|
—
|
|
|
1.7
|
|
||||
Other
|
0.3
|
|
|
0.6
|
|
|
—
|
|
|
0.9
|
|
||||
Property, plant and equipment, gross
|
4.0
|
|
|
2.9
|
|
|
(0.2
|
)
|
|
6.7
|
|
||||
Accumulated depreciation
|
(0.5
|
)
|
|
(0.2
|
)
|
|
0.2
|
|
|
(0.5
|
)
|
||||
Property, plant and equipment, net
|
$
|
3.5
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
6.2
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
|
|
|
(in millions)
|
|
|
|
|
||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
||||||||||||
Sales order book
|
$
|
54.6
|
|
|
$
|
15.6
|
|
|
$
|
39.0
|
|
|
$
|
54.6
|
|
|
$
|
12.0
|
|
|
$
|
42.6
|
|
Customer relationships
|
68.9
|
|
|
8.0
|
|
|
60.9
|
|
|
68.9
|
|
|
5.7
|
|
|
63.2
|
|
||||||
Total
|
$
|
123.5
|
|
|
$
|
23.6
|
|
|
$
|
99.9
|
|
|
$
|
123.5
|
|
|
$
|
17.7
|
|
|
$
|
105.8
|
|
|
December 31,
2015
|
|
Six Months Ended
June 30, 2016
|
|
June 30,
2016
|
||||||||||
|
|
PIK Interest
|
|
Repurchases
|
|
||||||||||
8% paid-in-kind toggle notes
|
$
|
247.6
|
|
|
$
|
6.8
|
|
|
$
|
(26.1
|
)
|
|
$
|
228.3
|
|
Less unamortized deferred financing costs
|
0.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.5
|
|
||||
Long-term debt
|
$
|
247.0
|
|
|
$
|
6.8
|
|
|
$
|
(26.0
|
)
|
|
$
|
227.8
|
|
•
|
under a future credit facility;
|
•
|
held by or for the benefit of the Pension Benefit Guaranty Corporation (“PBGC”) pursuant to any settlement of any actual or alleged Employee Retirement Income Security Act (“ERISA”) Section 4062(e) event;
|
•
|
held by any party with respect to any equity investment (or any commitment to make an equity investment) with respect to the financing of the American Centrifuge project;
|
•
|
held by DOE, export credit agencies or any other lenders or insurers with respect to the financing or government support of the American Centrifuge project; and
|
•
|
held by the U.S. government.
|
•
|
Level 1 – quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|
•
|
Level 3 – unobservable inputs in which little or no market data exists.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
174.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
174.5
|
|
|
$
|
234.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
234.0
|
|
Deferred compensation asset (a)
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation obligation (a)
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
(a)
|
The deferred compensation obligation represents the balance of deferred compensation plus net investment earnings. The deferred compensation plan is informally funded through a rabbi trust using variable universal life insurance. The cash surrender value of the life insurance policies is designed to track the deemed investments of the plan participants. Investment crediting options consist of institutional and retail investment funds. The deemed investments are classified within Level 2 of the valuation hierarchy because (i) of the indirect method of investing and (ii) unit prices of institutional funds are not quoted in active markets.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(in millions)
|
||||||
Principal balance
|
$
|
228.3
|
|
|
$
|
247.6
|
|
Estimated fair value
|
90.5
|
|
|
36.9
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service costs
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
|
$
|
2.0
|
|
Interest costs
|
8.9
|
|
|
9.3
|
|
|
17.7
|
|
|
18.6
|
|
||||
Expected return on plan assets (gains)
|
(10.5
|
)
|
|
(12.2
|
)
|
|
(21.0
|
)
|
|
(24.4
|
)
|
||||
Actuarial loss (gain) from remeasurement
|
0.8
|
|
|
(3.9
|
)
|
|
0.8
|
|
|
(3.9
|
)
|
||||
Net periodic benefit cost (credit)
|
$
|
0.1
|
|
|
$
|
(5.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(7.7
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest costs
|
1.9
|
|
|
2.2
|
|
|
4.0
|
|
|
4.4
|
|
||||
Expected return on plan assets (gains)
|
—
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
||||
Amortization of prior service (credits), net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Net periodic benefit cost
|
$
|
1.9
|
|
|
$
|
1.9
|
|
|
$
|
3.8
|
|
|
$
|
3.9
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
(in millions, except per share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted calculation:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(2.9
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(30.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
|
9.1
|
|
|
9.0
|
|
|
9.1
|
|
|
9.0
|
|
||||
Denominator for basic calculation
|
9.1
|
|
|
9.0
|
|
|
9.1
|
|
|
9.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock compensation awards (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Denominator for diluted calculation
|
9.1
|
|
|
9.0
|
|
|
9.1
|
|
|
9.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic and diluted
|
$
|
(0.32
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.92
|
)
|
|
$
|
(3.39
|
)
|
(a)
|
Compensation awards under the 2014 Equity Incentive Plan resulted in common stock equivalents of less than 0.1 million shares of common stock and are excluded from the diluted calculation as a result of net losses in the six months ended June 30, 2016 and the six month ended June 30, 2015.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||
|
2016
|
|
|
2015
|
|
2016
|
|
|
2015
|
||||||||
Options excluded from diluted net income per share
|
375,000
|
|
|
|
75,000
|
|
|
490,000
|
|
|
|
75,000
|
|
||||
Exercise price of excluded options
|
$
|
3.90
|
|
to
|
|
$
|
5.62
|
|
|
$
|
2.68
|
|
to
|
|
$
|
5.62
|
|
|
$
|
5.62
|
|
|
|
|
|
|
$
|
5.62
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total stock-based compensation costs:
|
|
|
|
|
|
|
|
||||||||
Restricted stock and restricted stock units
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Stock options, performance awards and other
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
||||
Expense included primarily in selling, general and administrative expense
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
|
|
|
|
|
|
|
||||||||
Total recognized tax benefit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Six Months Ended
June 30, |
||
|
2016
|
|
2015
|
Risk-free interest rate
|
1.9%
|
|
1.9%
|
Expected volatility
|
75%
|
|
75%
|
Expected option life (years)
|
6
|
|
6
|
Weighted-average grant date fair value
|
$1.77
|
|
$2.89
|
Options granted
|
15,000
|
|
300,000
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
LEU segment:
|
|
|
|
|
|
|
|
||||||||
Separative work units
|
$
|
54.9
|
|
|
$
|
42.2
|
|
|
$
|
114.2
|
|
|
$
|
145.8
|
|
Uranium
|
—
|
|
|
—
|
|
|
14.3
|
|
|
43.2
|
|
||||
|
54.9
|
|
|
42.2
|
|
|
128.5
|
|
|
189.0
|
|
||||
Contract services segment
|
8.5
|
|
|
21.1
|
|
|
24.9
|
|
|
42.1
|
|
||||
Revenue
|
$
|
63.4
|
|
|
$
|
63.3
|
|
|
$
|
153.4
|
|
|
$
|
231.1
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Gross Profit
|
|
|
|
|
|
|
|
|
|
||||||
LEU segment
|
$
|
5.6
|
|
|
$
|
5.5
|
|
|
$
|
13.7
|
|
|
$
|
12.7
|
|
Contract services segment
|
(0.1
|
)
|
|
(1.2
|
)
|
|
7.6
|
|
|
(1.5
|
)
|
||||
Gross profit
|
$
|
5.5
|
|
|
$
|
4.3
|
|
|
$
|
21.3
|
|
|
$
|
11.2
|
|
•
|
sales of the SWU component of LEU,
|
•
|
sales of both the SWU and uranium components of LEU, and
|
•
|
sales of natural uranium.
|
|
June 30,
2016 |
|
December 31, 2015
|
|
June 30,
2015 |
|
December 31, 2014
|
||||||||
SWU:
|
|
|
|
|
|
|
|
||||||||
Long-term price indicator ($/SWU)
|
$
|
69.00
|
|
|
$
|
72.00
|
|
|
$
|
82.00
|
|
|
$
|
90.00
|
|
Spot price indicator ($/SWU)
|
58.00
|
|
|
61.00
|
|
|
70.00
|
|
|
88.00
|
|
||||
UF
6
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term price composite ($/KgU)
|
117.01
|
|
|
128.97
|
|
|
136.19
|
|
|
146.64
|
|
||||
Spot price indicator ($/KgU)
|
75.50
|
|
|
98.50
|
|
|
101.50
|
|
|
100.50
|
|
•
|
Additional short-term purchases or sales of SWU and uranium;
|
•
|
Timing of customer orders, related deliveries, and purchases of LEU or components;
|
•
|
The outcome of legal proceedings and other contingencies, including discussions with the Pension Benefit Guaranty Corporation (“PBGC”);
|
•
|
Execution and funding of a new agreement with UT-Battelle, the operator of ORNL, for the continuation of American Centrifuge development and testing activities in Oak Ridge following the expiration of our agreement on September 30, 2016; and
|
•
|
Additional costs for American Centrifuge demobilization; decontamination and decommissioning of the Company’s facility in Ohio; or related to the overall transition of Centrus.
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
%
|
|||||||
LEU segment
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
SWU revenue
|
$
|
54.9
|
|
|
$
|
42.2
|
|
|
$
|
12.7
|
|
|
30
|
%
|
Uranium revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Total
|
54.9
|
|
|
42.2
|
|
|
12.7
|
|
|
30
|
%
|
|||
Cost of sales
|
49.3
|
|
|
36.7
|
|
|
(12.6
|
)
|
|
(34
|
)%
|
|||
Gross profit
|
$
|
5.6
|
|
|
$
|
5.5
|
|
|
$
|
0.1
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Contract services segment
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
8.5
|
|
|
$
|
21.1
|
|
|
$
|
(12.6
|
)
|
|
(60
|
)%
|
Cost of sales
|
8.6
|
|
|
22.3
|
|
|
13.7
|
|
|
61
|
%
|
|||
Gross profit (loss)
|
$
|
(0.1
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
1.1
|
|
|
92
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
63.4
|
|
|
$
|
63.3
|
|
|
$
|
0.1
|
|
|
—
|
%
|
Cost of sales
|
57.9
|
|
|
59.0
|
|
|
1.1
|
|
|
2
|
%
|
|||
Gross profit
|
$
|
5.5
|
|
|
$
|
4.3
|
|
|
$
|
1.2
|
|
|
28
|
%
|
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
%
|
|||||||
LEU segment
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
SWU revenue
|
$
|
114.2
|
|
|
$
|
145.8
|
|
|
$
|
(31.6
|
)
|
|
(22
|
)%
|
Uranium revenue
|
14.3
|
|
|
43.2
|
|
|
(28.9
|
)
|
|
(67
|
)%
|
|||
Total
|
128.5
|
|
|
189.0
|
|
|
(60.5
|
)
|
|
(32
|
)%
|
|||
Cost of sales
|
114.8
|
|
|
176.3
|
|
|
61.5
|
|
|
35
|
%
|
|||
Gross profit
|
$
|
13.7
|
|
|
$
|
12.7
|
|
|
$
|
1.0
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Contract services segment
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
24.9
|
|
|
$
|
42.1
|
|
|
$
|
(17.2
|
)
|
|
(41
|
)%
|
Cost of sales
|
17.3
|
|
|
43.6
|
|
|
26.3
|
|
|
60
|
%
|
|||
Gross profit (loss)
|
$
|
7.6
|
|
|
$
|
(1.5
|
)
|
|
$
|
9.1
|
|
|
607
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
153.4
|
|
|
$
|
231.1
|
|
|
$
|
(77.7
|
)
|
|
(34
|
)%
|
Cost of sales
|
132.1
|
|
|
219.9
|
|
|
87.8
|
|
|
40
|
%
|
|||
Gross profit
|
$
|
21.3
|
|
|
$
|
11.2
|
|
|
$
|
10.1
|
|
|
90
|
%
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
LEU segment (GAAP)
|
|
|
|
||||
Gross profit
|
$
|
13.7
|
|
|
$
|
12.7
|
|
Gross margin
|
10.7
|
%
|
|
6.7
|
%
|
||
|
|
|
|
||||
Legacy costs included in cost of sales:
|
|
|
|
||||
Pension and postretirement health and life benefits (a)
|
$
|
2.1
|
|
|
$
|
(0.1
|
)
|
Disability obligations and other (b)
|
3.4
|
|
|
0.3
|
|
||
Legacy costs
|
$
|
5.5
|
|
|
$
|
0.2
|
|
|
|
|
|
||||
LEU segment excluding legacy costs (Non-GAAP)
|
|
|
|
||||
Gross profit excluding legacy costs
|
$
|
19.2
|
|
|
$
|
12.9
|
|
Gross margin excluding legacy costs
|
14.9
|
%
|
|
6.8
|
%
|
||
|
|
|
|
||||
(a) Costs for pension and postretirement health and life benefits are affected by actuarial assumptions and other factors.
|
|||||||
(b) Costs for disability payment obligations increased $2.2 million in the six months ended June 30, 2016, compared to the corresponding period in 2015, due to disability status changes and other factors related to the fixed population receiving benefits.
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
%
|
|||||||
Gross profit
|
$
|
5.5
|
|
|
$
|
4.3
|
|
|
$
|
1.2
|
|
|
28
|
%
|
Advanced technology costs
|
4.7
|
|
|
4.0
|
|
|
(0.7
|
)
|
|
(18
|
)%
|
|||
Selling, general and administrative
|
12.5
|
|
|
6.3
|
|
|
(6.2
|
)
|
|
(98
|
)%
|
|||
Amortization of intangible assets
|
2.7
|
|
|
2.0
|
|
|
(0.7
|
)
|
|
(35
|
)%
|
|||
Special charges for workforce reductions and advisory costs
|
0.6
|
|
|
2.9
|
|
|
2.3
|
|
|
79
|
%
|
|||
Other income
|
(0.4
|
)
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(43
|
)%
|
|||
Operating loss
|
(14.6
|
)
|
|
(10.2
|
)
|
|
(4.4
|
)
|
|
(43
|
)%
|
|||
Gain on early extinguishment of debt
|
(16.7
|
)
|
|
—
|
|
|
16.7
|
|
|
—
|
%
|
|||
Interest expense
|
5.1
|
|
|
4.9
|
|
|
(0.2
|
)
|
|
(4
|
)%
|
|||
Interest (income)
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
|
—
|
%
|
|||
Loss before income taxes
|
(2.9
|
)
|
|
(15.1
|
)
|
|
12.2
|
|
|
81
|
%
|
|||
Provision (benefit) for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Net loss
|
$
|
(2.9
|
)
|
|
$
|
(15.1
|
)
|
|
$
|
12.2
|
|
|
81
|
%
|
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
%
|
|||||||
Gross profit
|
$
|
21.3
|
|
|
$
|
11.2
|
|
|
$
|
10.1
|
|
|
90
|
%
|
Advanced technology costs
|
16.7
|
|
|
5.8
|
|
|
(10.9
|
)
|
|
(188
|
)%
|
|||
Selling, general and administrative
|
23.9
|
|
|
18.6
|
|
|
(5.3
|
)
|
|
(28
|
)%
|
|||
Amortization of intangible assets
|
5.9
|
|
|
6.0
|
|
|
0.1
|
|
|
2
|
%
|
|||
Special charges for workforce reductions and advisory costs
|
0.6
|
|
|
3.5
|
|
|
2.9
|
|
|
83
|
%
|
|||
Other income
|
(0.7
|
)
|
|
(1.5
|
)
|
|
(0.8
|
)
|
|
(53
|
)%
|
|||
Operating loss
|
(25.1
|
)
|
|
(21.2
|
)
|
|
(3.9
|
)
|
|
(18
|
)%
|
|||
Gain on early extinguishment of debt
|
(16.7
|
)
|
|
—
|
|
|
16.7
|
|
|
—
|
%
|
|||
Interest expense
|
10.1
|
|
|
9.8
|
|
|
(0.3
|
)
|
|
(3
|
)%
|
|||
Interest (income)
|
(0.4
|
)
|
|
(0.2
|
)
|
|
0.2
|
|
|
100
|
%
|
|||
Loss before income taxes
|
(18.1
|
)
|
|
(30.8
|
)
|
|
12.7
|
|
|
41
|
%
|
|||
Provision (benefit) for income taxes
|
(0.6
|
)
|
|
(0.3
|
)
|
|
0.3
|
|
|
100
|
%
|
|||
Net loss
|
$
|
(17.5
|
)
|
|
$
|
(30.5
|
)
|
|
$
|
13.0
|
|
|
43
|
%
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Net Cash (Used in) Operating Activities
|
$
|
(49.9
|
)
|
|
$
|
(5.8
|
)
|
Net Cash Provided by Investing Activities
|
(1.6
|
)
|
|
5.5
|
|
||
Net Cash (Used in) Financing Activities
|
(8.0
|
)
|
|
—
|
|
||
Net (Decrease) in Cash and Cash Equivalents
|
$
|
(59.5
|
)
|
|
$
|
(0.3
|
)
|
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
174.5
|
|
|
$
|
234.0
|
|
Accounts receivable
|
51.3
|
|
|
26.5
|
|
||
Inventories, net
|
161.7
|
|
|
212.4
|
|
||
Other current assets and liabilities, net
|
(110.7
|
)
|
|
(165.2
|
)
|
||
Working capital
|
$
|
276.8
|
|
|
$
|
307.7
|
|
|
|
|
Centrus Energy Corp.
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 12, 2016
|
By:
|
/s/ Stephen S. Greene
|
|
|
|
|
Stephen S. Greene
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
||
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit No.
|
Description
|
|
|
3.1
|
Certificate of the Voting Powers, Designations, Preferences and Relative Participating, Optional and Other Special Rights and Qualifications, Limitations or Restrictions of Series A Participating Cumulative Preferred Stock of Centrus Energy Corp. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 7, 2016).
|
|
|
4.1
|
Rights Agreement dated as of April 6, 2016, among Centrus Energy Corp., Computershare Inc. (“Computershare”) and Computershare Trust Company, N.A., together with Computershare, as Rights Agent (filed as Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 7, 2016).
|
|
|
4.2
|
Form of Rights Certificate (filed as Exhibit 4.2 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 7, 2016).
|
|
|
10.1
|
2016 Executive Incentive Plan. (a)(c)
|
|
|
31.1
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended. (a)
|
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended. (a)
|
|
|
32.1
|
Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350. (b)
|
|
|
101
|
Condensed consolidated financial statements from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed in interactive data file (XBRL) format.
|
(a)
|
Filed herewith.
|
(b)
|
Furnished herewith.
|
(c)
|
Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 6 of this report.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Centrus Energy Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 12, 2016
|
/s/ Daniel B. Poneman
|
|
Daniel B. Poneman
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Centrus Energy Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 12, 2016
|
/s/ Stephen S. Greene
|
|
Stephen S. Greene
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
August 12, 2016
|
/s/ Daniel B. Poneman
|
|
Daniel B. Poneman
|
|
President and Chief Executive Officer
|
August 12, 2016
|
/s/ Stephen S. Greene
|
|
Stephen S. Greene
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|