<PAGE> 1
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange
Act of 1934
For the transition period from __________ to __________
Commission file number 0-17171
URANIUM RESOURCES, INC.
(exact name of Registrant as specified in its Charter)
DELAWARE 75-2212772
(State of Incorporation) (I.R.S. Employer Identification No.)
12750 MERIT DRIVE, SUITE 1020, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(214) 387-7777
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title of Each Class of Common Stock Number of Shares Outstanding
- ----------------------------------- ----------------------------
Common Stock, $.001 par value 8,758,527 as of May 10, 1996
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<PAGE> 2
URANIUM RESOURCES, INC.
1996 FIRST QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 (Unaudited) and
December 31, 1995 3
Consolidated Statements of Operations -
Three Months Ended March 31, 1996 and 1995
(Unaudited) 5
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996
and 1995 (Unaudited) 6
Notes to Consolidated Financial
Statements - March 31, 1996 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II -- OTHER INFORMATION 11
SIGNATURES 12
INDEX TO EXHIBITS E-1
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995 (NOTE 1)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,480,958 $ 4,715,942
Short-term investments:
Certificate of deposit, restricted 1,129,335 712,094
Receivables 1,461,069 4,005,191
Uranium inventory 1,400,310 663,487
Materials and supplies inventory 139,811 126,180
Prepaid and other current assets 210,992 127,519
------------ ------------
Total current assets 6,822,475 10,350,413
------------ ------------
Property, plant and equipment, at cost:
Uranium properties 59,208,660 56,735,549
Other property, plant and equipment 505,266 493,879
Less - accumulated depreciation and depletion (20,795,835) (19,929,621)
------------ ------------
Net property, plant and equipment 38,918,091 37,299,807
Other assets 445,866 434,897
------------ ------------
$ 46,186,432 $ 48,085,117
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated balance sheets.
3
<PAGE> 4
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995 (NOTE 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,016,875 $ 2,464,512
Accrued interest payable 43,065 39,843
Current portion of long-term debt 440,000 350,000
Royalties payable 605,875 811,686
Unearned revenue 276,721 528,970
Current portion of restoration reserve 898,000 544,000
Other accrued liabilities 786,581 901,707
------------ ------------
Total current liabilities 4,067,117 5,640,718
------------ ------------
Other long-term liabilities and deferred credits 2,582,993 2,777,351
Long-term debt, less current portion 7,047,507 7,137,507
Deferred federal income taxes 2,568,000 2,658,000
Shareholders' equity:
Common stock, $.001 par value, 12,500,000 shares
authorized; shares issued and outstanding (net of treasury
shares): 1996 - 8,754,777; 1995 - 8,645,698 8,907 8,798
Paid-in capital 18,037,604 17,626,510
Retained earnings 11,883,722 12,245,651
------------ ------------
29,930,233 29,880,959
Less: Treasury stock (152,500 shares), at cost (9,418) (9,418)
------------ ------------
Total shareholders' equity 29,920,815 29,871,541
------------ ------------
$ 46,186,432 $ 48,085,117
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated balance sheets.
4
<PAGE> 5
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Uranium sales -
Produced uranium $ 1,386,880 $ --
Purchased uranium 944,545 1,251,013
----------- -----------
Uranium sales 2,331,425 1,251,013
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium 580,125 612,813
Royalties 105,875 --
Operating expenses 688,791 245,584
Provision for restoration and reclamation costs 103,561 --
Depreciation and depletion 450,378 40,465
Loss on termination of joint venture -- 1,000,953
Loss on transfer to stockholder -- 1,080,000
Corporate expenses -
General and administrative 818,844 636,575
Depreciation 5,320 7,319
----------- -----------
Total costs and expenses 2,752,894 3,623,709
----------- -----------
Loss from operations (421,469) (2,372,696)
Other income (expense):
Interest expense, net of capitalized interest (102,899) (154,980)
Interest and other income, net 72,439 48,233
----------- -----------
Loss before income tax benefit (451,929) (2,479,443)
Federal income tax benefit:
Deferred (90,000) (495,000)
----------- -----------
Net loss $ (361,929) $(1,984,443)
=========== ===========
Net loss per common and common equivalent share $ (0.04) $ (0.25)
=========== ===========
Weighted average common shares and common equivalent
shares per share data 8,702,662 8,024,607
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated statements.
5
<PAGE> 6
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operations:
Net loss $ (361,929) $(1,984,443)
Reconciliation of net income to cash provided by operations-
Provision for restoration and reclamation costs 103,561 --
Depreciation and depletion 455,698 47,784
Credit for deferred income taxes (90,000) (495,000)
Decrease in restoration and reclamation accrual (14,781) (22,243)
Other non-cash items, net 67,035 46,480
----------- -----------
Cash flow provided by (used in) operations, before changes in
operating working capital items 159,584 (2,407,422)
Effect of changes in operating working capital items -
(Increase) decrease in receivables 2,544,122 (27,628)
(Increase) decrease in inventories (287,382) 612,221
Increase in prepaid and other current assets (150,508) (122,416)
Increase (decrease) in payables and accrued liabilities (2,017,601) 830,256
----------- -----------
Net cash provided by (used in) operations 248,215 (1,114,989)
----------- -----------
Investing activities:
Increase in investments (417,241) (130)
Additions to property, plant and equipment -
Kingsville Dome (1,196,864) (29,893)
Rosita (849,578) (215,994)
Churchrock (146,019) (166,473)
Crownpoint (167,570) (54,186)
Other property (107,565) (22,245)
Increase in other assets (9,565) --
----------- -----------
Net cash used in investing activities (2,894,402) (488,921)
----------- -----------
Financing activities:
Proceeds from borrowings -- 90,000
Payments and refinancings of principal -- (1,247,487)
Issuance of common stock 411,203 277,265
----------- -----------
Net cash provided by (used in) financing activities 411,203 (880,222)
----------- -----------
Net decrease in cash and cash equivalents (2,234,984) (2,484,132)
Cash and cash equivalents, beginning of period 4,715,942 2,527,600
----------- -----------
Cash and cash equivalents, end of period $ 2,480,958 $ 43,468
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated statements.
6
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URANIUM RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The accompanying statements should be read
in conjunction with the audited financial statements included in the Company's
1995 Annual Report on Form 10-K. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1996 are not necessarily indicative of the results that may be
expected for the full calendar year ending December 31, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
Operating Cash Flows
For the quarter ended March 31, 1996, the Company's cash and cash
equivalents decreased $2,235,000 as compared to a decrease of $2,484,000 for
1995. The Company's uranium operations generated positive cash flow from
operations of $248,000 for the quarter ended March 31, 1996, in comparison to
negative cash flow from operations in the same period in 1995 of $1,115,000.
The Company's net working capital at March 31, 1996 was $2,755,000.
During January, 1995, when companies controlled by Oren L. Benton (the
"Benton Companies") held effective control of the common stock of the Company,
the Company transferred $1 million to the Benton Companies in connection with a
planned joint venture to process uranium at a Benton Companies' mill. Because
of the Benton Bankruptcy, the realizability of the Company's $1 million
investment is doubtful. Shortly thereafter, an additional $1,080,000 was
transferred to or for the benefit of Mr. Benton or certain Benton Companies
without the authorization of the Company's Board of Directors. In February,
1995, Mr. Benton and certain of the Benton Companies filed for bankruptcy. In
June, 1995, the Company recovered $300,000 of the unauthorized transfer,
however the remaining $1.78 million has not been recovered and there can be no
assurance that the Company's efforts to pursue remedies will be successful. A
loss for these transactions was recorded in 1995 which resulted in a reduction
of $1.78 million ($2.08 million for the quarter ended March 31, 1995) in the
Company's equity.
Investing Cash Flows
The Company resumed development activities at its Rosita site during
the second quarter of 1995 and uranium production began in June, 1995. During
the three months ending March 31, 1996, $850,000 in development expenditures
were incurred at Rosita. Capital expenditures to be incurred for the remainder
of 1996 at Rosita, primarily for additional wellfield development, are expected
to be approximately $3,458,000. Significant development activities at the
Company's Kingsville Dome facility began in December, 1995 and resulted in
commencement of production at this site in April, 1996. Capital expenditures
at Kingsville Dome during the three months ending March 31, 1996 totaled
$1,197,000 and are expected to be $4,232,000 for the remainder of 1996.
Additional capital expenditures including permitting, land acquisition and land
holding costs at Churchrock, Crownpoint and Vasquez are expected to amount to
approximately $916,000. Approximately $421,000 was incurred on these properties
during the first quarter of 1996. The Company expects to fund its 1996
operations and capital expenditures from cash on hand, sales proceeds under
1996 uranium deliveries from its existing sales contracts, additional spot
market uranium sales and through
7
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additional sources of financing or equity infusions. Long-term operating and
capital needs are expected to be satisfied through future sales proceeds from
current and additional uranium delivery commitments and through additional
financing and/or equity sources.
During the three months ended March 31, 1995 $216,000 in development
expenditures were incurred at the Company's Rosita property. Capital
expenditures at the Company's other properties in the same period totaled
approximately $273,000.
Financing Cash Flows
In the first quarter of 1996 the Company generated $411,000 from
issuance of approximately 110,000 shares of common stock upon the exercise of
certain employee stock options. In the same period in 1995, approximately
$880,000 was used in financing activities from the net repayment of principal
borrowings of $1,158,000 which were partially offset by inflows of $277,000
from the issuance of approximately 95,000 shares of common stock generated by
employee stock option exercises.
ENVIRONMENTAL ASPECTS
The Company utilizes in situ leach ("ISL") solution mining technology
as its only mining method. Unlike conventional uranium mining companies, the
Company's mining technology does not create "tailings". Nevertheless, the
Company is highly regulated. Its primary environmental costs to date have been
related to obtaining and complying with environmental mining permits and, once
mining is completed, the reclamation and restoration of the surface areas and
underground water quality to a condition consistent with applicable
requirements. Accruals for the estimated future cost of such activities are
made on a per-pound basis as part of production costs. See also Note 1 -
"Restoration and Reclamation Costs" of Notes to Consolidated Financial
Statements in the Company's Form 10-K as of December 31, 1995.
RESULTS OF OPERATIONS
Revenues, earnings from operations and net income for the Company can
fluctuate significantly on a quarter to quarter basis during the year because
of the timing of deliveries requested by its utility customers. The Company's
customers have generally elected, where possible, to take delivery of the bulk
of the annual deliveries under their long-term sales contracts later in each
year. Accordingly, operating results for any quarter or year-to-date period are
not necessarily comparable and may not be indicative of the results which may
be expected for future quarters or the entire year.
Three Months Ended March 31, 1996 and 1995
The following is a summary of the key operational and financial
statistics related to the Results of Operations:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1996 1995
--------- ---------
(In thousands, except per
pound data)
<S> <C> <C>
Uranium sales revenue $ 2,331 $ 1,251
Total pounds delivered 158.8 66.3
Average sales price/pound $ 14.69 $ 18.88
Pounds produced 186 --
Pounds purchased 49 --
Average production cost of produced pounds $ 8.96 N/A
Average cost of purchased pounds $ 11.90 --
Average cost of produced pounds sold $ 8.45 --
Average cost of purchased pounds sold $ 11.90 $ 9.25
</TABLE>
8
<PAGE> 9
Revenue from uranium sales in the first quarter of 1996 increased by
$1,080,000 from 1995 levels. Total uranium deliveries in 1996 increased by
93,000 pounds from those made in the three months ended March 31, 1995. This
increase was primarily a result of a sale of 110,000 pounds in the first
quarter of 1996 under the matched sale provision of the Amendment to the
Russian Federations Suspension Agreement (the "Amendment"); this delivery
consisted entirely of URI produced uranium. No deliveries under the Amendment
were made during the first quarter of 1995. Sales under the Company's long-term
contracts not subject to the Amendment totaled 49,000 pounds in the first
quarter of 1996 compared to deliveries in the same period in 1995 of 66,000
pounds. The average sales price per pound for these 1996 deliveries under URI
long-term contracts was $19.38 and the average sales price per pound for the
1995 long-term contract deliveries was $18.88 per pound. Changes in the market
price of uranium can have a significant impact on the Company's results of
operations.
Details of the cost of uranium sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended
--------------------
1996 1995
------ ------
(In thousands)
<S> <C> <C>
Cost of purchased uranium $ 580 $ 613
Royalties 106 --
Operating expenses 689 246
Provision for restoration and reclamation costs 104 --
Depreciation and depletion of uranium properties 450 40
Loss on termination of joint venture -- 1,001
Loss on transfer to stockholders -- 1,080
------ ------
Total cost of uranium sales $1,929 $2,980
====== ======
</TABLE>
The Company resumed production at its Rosita facility in June, 1995
and produced over 186,000 pounds as the Company wound down production from
wellfield 3 at Rosita and commenced production from new wellfields 4 and 5.
Recovery from wellfield 3 has exceeded 95% of its in-place reserve estimates
which is over 10% more than originally anticipated. Production costs at Rosita
for the three months ended March 31, 1996 averaged $8.96 per pound versus the
$10.40 originally projected.
The average cost of uranium purchases made in the first quarter of
1996 was $11.90 per pound. Deliveries in 1996 consisted of 49,000 purchased
pounds, at an average cost per pound of $11.90, and 110,000 produced pounds at
$8.45 per pound. During the first quarter of 1995, the Company delivered 66,000
purchased pounds at an average cost per pound of $9.25. Operating expenses
attributable directly to the sale of the Company's produced pounds totaled
$396,000 in the first quarter of 1996. No produced pounds were sold in the same
period in 1995.
Total operating expenses and depreciation and depletion in the first
three months of 1996 and 1995 include standby costs for the Kingsville Dome and
Rosita facilities. These costs have been recorded as direct charges to
operations. Standby costs for 1996 and 1995 were $313,000 and $286,000,
respectively.
Royalties in the first three months of 1996 totaled $106,000. No
royalties were incurred in 1995. The increase in 1996 is directly attributable
to the resumption of production at Rosita and the corresponding sales of URI
product.
The provision for restoration and reclamation in the first three
months of 1996 consists entirely of the provision for Rosita production sold of
$104,000 ($0.93 per pound).
The depreciation and depletion provision in the first quarter of 1996
consisted of the $3.91 rate per pound for Rosita production sold of $430,000
and Kingsville Dome depreciation while on standby of $21,000. The first quarter
1995 provision for depreciation and depletion is comprised entirely of Rosita
and Kingsville Dome depreciation while on standby of $40,000.
Corporate expenses consisting of general and administrative ("G & A")
expenses increased to $824,000 in the first quarter of 1996 from $644,000 in
the first quarter of 1995. This increase resulted primarily from employee
9
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incentive bonuses awarded in the first quarter of 1996 ($105,000) and costs in
part related to legal actions the Company is aggressively pursuing against
certain companies affiliated with Mr. Oren L. Benton ($116,000) related to the
improper transfer of $1,080,000 from the Company in the first quarter of 1995.
Loss from operations in the first quarter of 1996 was $421,000
compared to a loss in the first quarter of 1995 of $2,373,000. This change was
attributable to the losses from the termination of the joint venture
($1,001,000) and loss on unauthorized transfers ($1,080,000) made in 1995.
Total interest costs for the first quarter of 1996, including
capitalized amounts, decreased by $52,000 compared to 1995. This decrease to
$103,000 from $155,000 in 1995 resulted from lower average outstanding debt
balances related primarily to the bank debt with Union Bank of Switzerland in
1995.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
URANIUM RESOURCES, INC.
Dated: May 10, 1996 By: /S/ Paul K. Willmott
----------------------
Paul K. Willmott
Director, President and
Chief Executive Officer
Dated: May 10, 1996 By: /S/ Thomas H. Ehrlich
-----------------------
Thomas H. Ehrlich
Vice President - Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
12
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
27 FINANCIAL DATA SCHEDULE
E-1
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,480,958
<SECURITIES> 1,129,335
<RECEIVABLES> 1,461,069
<ALLOWANCES> 0
<INVENTORY> 1,400,310
<CURRENT-ASSETS> 6,822,475
<PP&E> 59,713,926
<DEPRECIATION> (20,795,835)
<TOTAL-ASSETS> 46,186,432
<CURRENT-LIABILITIES> 4,067,117
<BONDS> 7,047,507
<COMMON> 8,907
0
0
<OTHER-SE> 29,911,908
<TOTAL-LIABILITY-AND-EQUITY> 46,186,432
<SALES> 2,331,425
<TOTAL-REVENUES> 2,331,425
<CGS> 1,928,730
<TOTAL-COSTS> 2,752,894
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102,899
<INCOME-PRETAX> (451,929)
<INCOME-TAX> (90,000)
<INCOME-CONTINUING> (361,929)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (361,929)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
