USEC struggles to regain footing Bethesda nuclear fuel provider reorganizes following $541M loss by Kevin James Shay, Staff Writer More News
It’s a time of transition at Bethesda’s USEC, one of Maryland’s largest companies in terms of revenues.
Coming off its worst year financially since going public in 1998, the supplier of enriched uranium fuel to nuclear power plants plans to soon shed two top executives.
“2012 will be a year of transition for USEC,” CEO John Welch said in a recent conference call. “We are taking steps to evolve from our legacy operations that have defined us in the past to a company that is appropriately sized for the work we will do in the future.”
Last year, USEC lost $540.7 million after turning a profit in previous recent years. Revenues fell by 18 percent from 2010 to $1.67 billion, the lowest since 2008.
Even with the lower sales, USEC is the 12th-largest Maryland company based on revenues.
Much of USEC’s loss last year was due to expenses associated with its American Centrifuge Plant in Piketon, Ohio, along with higher production costs at its gaseous diffusion plant in Paducah, Ky., Welch said. USEC may end operations at the Paducah plant next month after its power contract runs out, officials said.
“We do not see sufficient commercial demand to support Paducah production of low-enriched uranium for utility customers after the Tennessee Valley Authority contract expires,” Welch said in the conference call in mid-March.
While USEC has not made a decision, the company is “approaching the time when we may have to close that plant,” Paul Jacobson, a USEC spokesman, said Thursday. “We have hired outside advisors and are making the company more efficient to adjust to the new business environment.”
Lance Wright, senior vice president of human resources and administration, plans to retire next month and turned over his duties last week to work on an organizational review effort. Christine Ciccone, senior vice president of external relations, is leaving the company Friday.
Richard Rowland, corporate director of human resources, is now USEC’s principal human resources executive. Information technology and other functions that reported to Ciccone will do so to other executives.
USEC stock was trading at $1.07 a share on Thursday. Two years ago, it was selling at $6.42; five years ago, it sold for $23.91.
As of Dec. 31, USEC had 1,885 employees, including 98 at its Bethesda headquarters, according to its 2011 annual report. That was down from 2,949 and 101, respectively, a year earlier. The bulk of the cuts was at the American Centrifuge Plant in Ohio, which shed more than 1,000 employees last year.
In Kentucky, USEC operates the only U.S.-owned uranium enrichment facility in the country, supplying uranium fuel to more than half of the U.S. nuclear plant market and a quarter of the world’s market.
USEC plans to put more emphasis on its research and development programs in the next two years, Welch said. The company is working with federal officials on government funding for the centrifuge plant in Ohio, he said. USEC is seeking a loan guarantee from the Department of Energy to help finance the plant’s development.
USEC has been developing the centrifuge technology, which is designed to be more energy-efficient than the gaseous diffusion method used at its current plant, since 2002, with construction of the Ohio facility starting in 2007.
“We have been encouraged by the administration’s increasingly vocal support for the essential national security role that the American Centrifuge project could play in providing an indigenous source of enriched uranium,” Welch said.
USEC has seen worldwide demand for its products grow, with 62 nuclear reactors under construction and almost half of those in China, Welch said.
“As those units come online, they will be adding to the demand,” he said.
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