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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 June 30, 2000 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 720, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(972) 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, $0.001 par value 14,520,366 as of August 14, 2000
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URANIUM RESOURCES, INC.
2000 FIRST QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999
(Unaudited) 3
Consolidated Statements of Operations -
Three and Six Months Ended June 30, 2000 and 1999
(Unaudited) 5
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2000
and 1999 (Unaudited) 6
Notes to Consolidated Financial
Statements - June 30, 2000 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS E-1
</TABLE>
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999 (NOTE 1)
ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
------------ ------------
2000 1999
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 496,730 $ 493,567
Receivables, net 80,291 1,155,198
Uranium inventory -- 112,901
Materials and supplies inventory 64,742 70,319
Prepaid and other current assets 16,420 45,913
------------ ------------
Total current assets 658,183 1,877,898
------------ ------------
Property, plant and equipment, at cost:
Uranium properties 99,191,337 99,400,677
Other property, plant and equipment 383,166 383,229
Less-accumulated depreciation and depletion (97,961,488) (97,578,333)
------------ ------------
Net property, plant and equipment 1,613,015 2,205,573
Long-term investment:
Certificate of deposit, restricted 3,651,758 3,651,758
Other assets 4,299 4,299
------------ ------------
$ 5,927,255 $ 7,739,528
============ ============
</TABLE>
The accompanying notes to financial statements are an integral
part of these consolidated balance sheets.
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URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999 (NOTE 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
------------ ------------
2000 1999
------------ ------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 424,850 $ 396,836
Notes payable -- 575,000
Accrued interest payable -- 2,336
Current portion of long-term debt 1,000 5,000
Royalties payable -- 64,922
Current portion of restoration reserve 83,000 83,000
Other accrued liabilities 331,548 164,646
------------ ------------
Total current liabilities 840,398 1,291,740
------------ ------------
Other long-term liabilities and deferred credits 6,180,438 6,474,680
Long-term debt, less current portion 450,605 6,372,208
Shareholders' equity:
Common stock, $0.001 par value,
shares authorized: 35,000,000;
shares issued and outstanding (net of treasury shares):
2000 - 14,520,366; 1999 - 12,341,290 14,673 12,494
Paid-in capital 47,032,653 40,737,736
Retained earnings (accumulated deficit) (48,582,094) (47,139,912)
Less: Treasury stock (152,500 shares), at cost (9,418) (9,418)
------------ ------------
Total shareholders' equity (1,544,186) (6,399,100)
------------ ------------
$ 5,927,255 $ 7,739,528
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part
of these consolidated balance sheets.
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URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Uranium sales -
Produced uranium $ -- $ 1,036,350 $ 121,954 $ 1,036,350
Purchased uranium -- -- 815,148 1,512
----------- ----------- ------------ ------------
Uranium sales -- 1,036,350 937,102 1,037,862
Other uranium revenues -- -- 144,793 --
----------- ----------- ------------ ------------
Total revenue -- 1,036,350 1,081,895 1,037,862
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium -- -- 799,850 --
Royalties -- 57,234 16,626 57,234
Operating expenses 257,984 1,258,292 617,179 1,707,620
Provision for restoration and reclamation costs 107 115,943 12,297 135,943
Depreciation and depletion 44,469 326,314 155,927 349,177
Writedown of uranium properties 80,798 -- 274,723 --
----------- ----------- ------------ ------------
Total cost of uranium sales 383,358 1,757,783 1,876,602 2,249,974
----------- ----------- ------------ ------------
Loss from operations
before corporate expenses (383,358) (721,433) (794,707) (1,212,112)
Corporate expenses -
General and administrative 363,165 501,692 814,279 993,639
Depreciation 5,989 6,863 11,556 12,943
----------- ----------- ------------ ------------
Total corporate expenses 369,154 508,555 825,835 1,006,582
----------- ----------- ------------ ------------
Loss from operations (752,512) (1,229,988) (1,620,542) (2,218,694)
Other income (expense):
Interest expense, net of capitalized interest (14,643) (36,909) (53,742) (76,844)
Interest and other income, net 168,037 60,044 232,102 104,806
----------- ----------- ------------ ------------
Total other income 153,394 23,135 178,360 27,962
----------- ----------- ------------ ------------
Loss before federal income taxes (599,118) (1,206,853) (1,442,182) (2,190,732)
Federal income tax benefit:
Deferred -- (65,810) -- (263,810)
----------- ----------- ------------ ------------
Net loss $ (599,118) (1,141,043) $ (1,442,182) $ (1,926,922)
=========== =========== ============ ============
Net loss per common share and
common equivalent (basic and diluted) $ (0.04) $ (0.09) $ (0.10) $ (0.16)
=========== =========== ============ ============
Weighted average common shares and common
equivalent shares per share data:
Basic 14,520,366 12,055,262 14,038,017 12,054,151
=========== =========== ============ ============
Diluted 14,520,366 12,055,262 14,038,017 12,054,151
=========== =========== ============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated statements.
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URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30
-----------------------------
2000 1999
----------- ------------
<S> <C> <C>
Cash flows from operations:
Net loss $(1,442,182) $(1,926,922)
Reconciliation of net income to cash provided by operations-
Provision for restoration and reclamation costs 12,297 135,943
Depreciation and depletion 167,483 362,120
Writedown of uranium properties 274,723 --
Credit for deferred income taxes -- (263,810)
Decrease in restoration and reclamation accrual (86,738) (289,985)
Other non-cash items, net 80,625 873,558
----------- -----------
Cash flow used in operations, before changes in
operating working capital items (993,792) (1,109,096)
Effect of changes in operating working capital items-
Decrease in receivables 1,074,907 1,476,923
Decrease in inventories 47,688 197,045
(Increase) decrease in prepaid and other current assets 911 (172,331)
Increase (decrease) in payables and accrued liabilities 127,658 (1,518,993)
----------- -----------
Net cash provided by (used in) operations 257,372 (1,126,452)
----------- -----------
Investing activities:
Increase in investments -- (2,432)
(Additions to) proceeds from property, plant and equipment -
Kingsville Dome 113,445 (80,905)
Rosita (36,315) (43,719)
Vasquez (38,756) (45,798)
Alta Mesa -- (30,842)
Churchrock (65,633) (418,091)
Crownpoint 355,096 (504,160)
Other property (3,075) (126,057)
----------- -----------
Net cash provided by (used in) investing activities 324,762 (1,252,004)
----------- -----------
Financing activities:
Proceeds from borrowings -- 1,400,000
Payments and refinancings of principal (578,971) (2,388,988)
----------- -----------
Net cash used in financing activities (578,971) (988,988)
----------- -----------
Net increase (decrease) in cash and cash equivalents 3,163 (3,367,444)
Cash and cash equivalents, beginning of period 493,567 3,713,566
----------- -----------
Cash and cash equivalents, end of period $ 496,730 $ 346,122
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part
of these consolidated statements.
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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 unaudited financial statements included in the Company's 1999 Annual
Report on Form 10-K. As a result of the Company not having an audit performed on
its December 31, 1999 financial statements, the financial statements contained
in this report have not been reviewed by the Company's independent public
accountants. 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 and six months ended June 30, 2000 are
not necessarily indicative of the results that may be expected for the full
calendar year ending December 31, 2000.
2. FUTURE OPERATIONS
The financial statements of the Company have been prepared on the basis
of accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. Due to a continued period of depressed prices for uranium as
compared to the Company's cost to produce uranium, the Company has generated
operating losses in each of the last three years. Operating losses have
continued during the first two quarters of 2000. Such price declines have
reduced the market price of uranium to levels that are currently below the
Company's cost to produce uranium and below levels needed by the Company to
obtain the necessary financing to allow development of new production areas at
its South Texas sites. These factors raise substantial doubt concerning the
ability of the Company to continue operating as a going concern.
In 1999 and the first quarter of 2000 the Company monetized all of its
remaining long-term uranium sales contracts and sold certain of its property and
equipment to maintain a positive cash position. In August, the Company raised
$730,000 of equity by the issuance of 7.3 million shares of Common Stock at
$0.10 per share to a group of private investors. The investors were also issued
five-year warrants to purchase an aggregate of 5,475,000 shares of Common Stock
at an exercise price of $0.20 per share. The Company also signed a letter of
intent with Texas regulatory authorities and the Company's bonding company that,
when finalized, would provide the Company access to up to $2.3 million of
Company funds pledged to secure the Company's restoration bonds. Approximately
$250,000 has been released to the Company to date under the letter of intent.
The funds are being used by the Company to perform restoration at the Company's
Kingsville Dome and Rosita mine sites in South Texas. When finalized, the term
of the agreement is expected to run through the end of 2001. Discussions to
finalize this agreement are ongoing and are expected to be completed in August
2000.
The Company also stated that certain key employees will convert
$186,756 of previously deferred compensation into shares of Common Stock at
$0.20 per share. These persons will also continue to defer a portion of their
compensation and will be entitled to convert that deferred compensation into
shares of Common Stock at $0.20 per share. The Company will also issue certain
key employees stock options to acquire a total of 2.25 million shares of Common
Stock at $0.20 per share, subject to stockholder approval. In addition, the
Company will allow holders of current outstanding options covering 903,632
shares of Common Stock at prices ranging from $0.25 per share to $17.00 per
share to surrender these options for new options with an option price of $0.20
per share.
The Company also reached a compromise with its regulatory counsel
settling an outstanding indebtedness of approximately $560,000 for a payment of
$100,000 in cash, the assignment of certain claims, the issuance of 720,000
shares of Common Stock and an agreement to issue an additional 200,000 shares
upon the occurrence of certain events.
During the fourth quarter of 1998 the Company began implementation of
the shut-in and placement on stand-by of its Kingsville Dome and Rosita
production facilities in response to these market conditions. Each production
site was shut-in in the first quarter of 1999 but the Company maintained nominal
production through July 1999 when the incremental production cost of operating
exceeded the cost of purchasing uranium on the spot market.
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The Company will also require additional capital resources to fund the
cost to resume production and to fund development of its undeveloped properties.
There is no assurance the Company will be successful in raising such capital or
that uranium prices will recover to levels which would enable the Company to
operate profitably. If the Company is unsuccessful in these efforts the Company
will cease to continue as a going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern. The ability of the Company to continue as a going
concern is dependent upon a recovery of uranium prices, its ability to restart
its uranium production facilities and successfully produce uranium at
economically feasible levels and its ability to successfully raise capital to
support ongoing operations and future development efforts.
3. LONG-TERM DEBT/SHAREHOLDERS' EQUITY
LINDNER NOTE CONVERSION
In February 2000, the Company converted $6,000,000 in debt and $344,000
in accrued interest into 2,111,478 shares of the Company's common stock related
to the convertible note issued in May 1995 from Lindner Investments and Lindner
Dividend Fund (the "Lindner Note"). In connection with the Lindner Note, the
Company issued warrants to purchase up to 1,000,000 shares of the Company's
common stock at $3.00 per share. Such warrants expired unexercised on May 31,
2000.
CAPITALIZED INTEREST
Interest capitalized in the six months ended June 30, 2000 and 1999 was
$61,000 and $305,000, respectively. Total interest costs in these periods were
$115,000 and $382,000, respectively.
4. URANIUM PROPERTIES
PROPERTY REALIZABILITY
The Company's near-term potential illiquidity has necessitated a
reevaluation of the Company's method of valuing its uranium properties for
accounting purposes as of December 31, 1999 and June 30, 2000. Prior to the
fourth quarter of 1999, the Company had previously valued its uranium properties
on a held for production basis, i.e., assuming that each property would be
ultimately placed into production. Because of the Company's potential
illiquidity, the Company has determined that it should value these properties on
a held for sale basis.
On a held for sale basis the Company has determined that the discounted
cash flow method is the most reasonable method for valuing the properties,
because of the lack of any data on sales of comparable properties or any other
method that is reasonably available. For the six months ended June 30, 2000 this
valuation method had the effect of expensing the capital costs incurred on the
Company's uranium properties. Such costs totaled $275,000 during the first half
of 2000.
CROWNPOINT UNIT I PROPERTY
The Company had mineral leases on nine separate parcels of land in
northwest New Mexico with Navajo allotees who are the beneficial owners of the
surface and mineral rights. The leases have been and are subject to approval by
the Bureau of Indian Affairs (the "BIA"). Such approval had not been received at
December 31, 1999 and the Company requested the return of escrowed funds for six
of the Unit I leases which require additional efforts to complete the leasing
process. In March 2000, the Company received funds totaling $440,000 related to
these six leases. This transaction resulted in the writedown of the carrying
value of the Company's uranium properties of $440,000 in the first quarter of
2000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
This Item 2 contains "forward-looking statements" which are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements include, without limitation, statements
relating to liquidity, financing of operations, continued volatility of uranium
prices, estimates of future capital expenditures, proved undeveloped reserves
and other such matters. The words "believes," "expects," "projects," "targets,"
or "estimates" and similar expressions identify forward-looking statements. The
Company does not undertake to update, revise or correct any of the
forward-looking information. Readers are cautioned that such forward-looking
statements should be read in conjunction with the Company's disclosures under
the heading: "Cautionary Statement for the Purposes of the `Safe Harbor'
Provisions of the Private Securities Litigation Reform Act of 1995" in the
Company's 1999 Annual Report on Form 10-K.
GOING CONCERN/UNCERTAIN FUTURE OPERATIONS
The Company ceased production activities in 1999 at both of its two
producing properties because of depressed uranium prices. In 1999 and the first
quarter of 2000 the Company monetized all of its remaining long-term uranium
sales contracts and sold certain of its property and equipment to maintain a
positive cash position. In August, the Company raised $730,000 of equity by the
issuance of 7.3 million shares of Common Stock at $0.10 per share to a group of
private investors. The investors were also issued five-year warrants to purchase
an aggregate of 5,475,000 shares of Common Stock at an exercise price of $0.20
per share. The Company also signed a letter of intent with Texas regulatory
authorities and the Company's bonding company that, when finalized, would
provide the Company access to up to $2.3 million of Company funds pledged to
secure the Company's restoration bonds. Approximately $250,000 has been released
to the Company to date under the letter of intent. The funds are being used by
the Company to perform restoration at the Company's Kingsville Dome and Rosita
mine sites in South Texas. When finalized, the term of the agreement is expected
to run through the end of 2001. Discussions to finalize this agreement are
ongoing and are expected to be completed in August 2000.
The Company also stated that certain key employees will convert
$186,756 of previously deferred compensation into shares of Common Stock at
$0.20 per share. These persons will also continue to defer a portion of their
compensation and will be entitled to convert that deferred compensation into
shares of Common Stock at $0.20 per share. The Company will also issue certain
key employees stock options to acquire a total of 2.25 million shares of Common
Stock at $0.20 per share, subject to stockholder approval. In addition, the
Company will allow holders of current outstanding options covering 903,632
shares of Common Stock at prices ranging from $0.25 per share to $17.00 per
share to surrender these options for new options with an option price of $0.20
per share.
The Company also reached a compromise with its regulatory counsel
settling an outstanding indebtedness of approximately $560,000 for a payment of
$100,000 in cash, the assignment of certain claims, the issuance of 720,000
shares of Common Stock and an agreement to issue an additional 200,000 shares
upon the occurrence of certain events.
CAPITAL RESOURCES AND LIQUIDITY
Operating Cash Flows and Liquidity
For the quarter ended June 30, 2000, the Company's cash and cash
equivalents of $497,000 represented a decrease of $349,000 for the quarter. This
compares to a decrease of $323,000 for the second quarter of 1999. The Company's
uranium operations used cash flow from operations of $428,000 for the quarter
ended June 30, 2000, in comparison to cash flow used in operations in the same
period in 1999 of $17,000. The Company's net working capital at June 30, 2000
was a negative $182,000.
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As a result of the volatility of spot prices in the uranium
marketplace, the Company shut-in and placed on stand-by its two South Texas
facilities in the first quarter of 1999. Nominal production from these sites
continued through July 1999 until their incremental production costs exceeded
the cost of purchasing uranium in the marketplace. The Company continues to
maintain certain activities at these locations including its ongoing groundwater
restoration efforts.
Investing Cash Flows
South Texas Projects
During the six months ending June 30, 2000, capitalized expenditures at
the Company's South Texas locations totaled $124,000. Also during this period,
the Company sold a parcel of land at Kingsville Dome which generated $162,000 of
cash to the Company. Capital expenditures for the balance of 2000 for these
properties is expected to be minimal. The Company will require additional
sources of funding in 2000 to fund its operating activities including those at
the Kingsville Dome and Rosita locations.
New Mexico Projects
Capital expenditures at the Company's Churchrock and Crownpoint
projects for permitting and land holding costs totaled approximately $150,000
for the six months ending June 30, 2000 compared to costs of $922,000 for the
first six months of 1999. Capital expenditures for the remainder of 2000 for
these properties is expected to be minimal. In March 2000, the Company received
$440,000 in escrowed funds related to certain of the Company's Crownpoint Unit I
properties.
Financing Cash Flows
In July 1999, the Company extended its revolving credit facility
through July 2000. This facility is secured by the Company's uranium inventory
and/or by receivables from its uranium sales contracts. Principal and interest
payments under the loan are due monthly, with interest on the loan accruing at
the prime rate plus 1%. Principal advances, outstanding under the facility
totaled $575,000 at December 31, 1999 and such amount was repaid in the first
quarter of 2000. At March 31, 2000, the Company had monetized all of its uranium
sales contracts and uranium inventories. Without these underlying assets the
Company was unable to draw on the credit facility or utilize it as a source of
working capital, and terminated the agreement in the second quarter of 2000.
ENVIRONMENTAL ASPECTS
The Company utilizes 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 the Consolidated Statements of Operations for
the applicable provisions for such future 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, 1999.
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. 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 for the entire year.
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Three and Six Months Ended June 30, 2000 and 1999
The following is a summary of the key operational and financial
statistics related to the Results of Operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- -----------------------
2000 1999 2000 1999
-------- --------- ------- -------
(In thousands, except per pound data)
<S> <C> <C> <C> <C>
Uranium sales revenue $ -- $1,036 $ 937 $1,038
Other uranium revenues -- -- 145 --
Total pounds delivered -- 70 98 70
Average sales price/pound N/A $14.81 $ 9.58 $14.83
Pounds produced -- 35 -- 103
Pounds purchased -- -- 85 --
Average production cost of produced pounds N/A (a) N/A (a)
Average cost of purchased pounds N/A N/A $ 9.41 N/A
Average cost of produced pounds sold N/A $13.01 N/A $13.01
Average cost of purchased pounds sold N/A N/A $ 9.41 N/A
</TABLE>
(a) The Company ceased uranium production operations in the first quarter of
1999 when its South Texas projects were placed on stand-by. Costs while on
stand-by are expensed to operating expenses as they are incurred. A nominal
amount of production has occurred while the projects have been on stand-by, the
inventory resulting from such incidental production was valued at the spot
market cost.
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The Company delivered 98,000 pounds of uranium in the first quarter of
2000, and does not have any remaining deliveries scheduled for the balance of
2000 or beyond. The Company delivered 70,000 pounds of uranium in the first half
of 1999 at an average sales price of $14.23 per pound.
Details of the cost of uranium sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -----------------------
2000 1999 2000 1999
-------- -------- ------- -------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Cost of purchased uranium $ -- $ -- $ 800 $ --
Royalties -- 57 17 57
Operating expenses 258 1,258 617 1,708
Provision for restoration and reclamation costs -- 116 12 136
Depreciation and depletion of uranium properties 44 326 156 349
Writedown of uranium properties 81 -- 275 --
------ ------ ------ ------
Total cost of uranium sales $ 383 $1,757 $1,877 $2,250
====== ====== ====== ======
</TABLE>
The Company placed its South Texas production facilities on stand-by in
the first quarter of 1999 but maintained nominal production until the
incremental cost of production exceeded the cost of purchasing uranium in the
spot market. All production activities ceased in July 1999. Total production in
the first six months of 1999 was 103,000 pounds.
Operating expenses in the first six months of 2000 resulted from the
sale in uranium inventory ($43,000) and restoration operations costs ($574,000).
Operating expenses in the first half of 1999 were $1,708,000 and consisted of
stand-by costs ($713,000), production sold ($572,000 or $8.17 per pound) and a
lower of cost of market inventory adjustment ($423,000).
The provision for restoration and reclamation in the first six months
of 2000 was $12,000, compared to $136,000 for 1999. Such amount in 1999
consisted of $66,000 ($0.94 per pound) for production sold and $70,000 for
restoration related to a previous production site.
The depreciation and depletion provision in the six months ended June
30, 2000 was $156,000 compared to $349,000 in the first half of 1999. The 1999
amount consisted of $273,000 ($3.90 per pound) for produced uranium sold and
$76,000 for depreciation while on stand-by.
The Company incurred royalties from production sold in the first half
of 2000 of $17,000. Royalty expense in the first half of 1999 was $57,000.
Uranium purchases were made in the first half of 2000 consisting of
85,000 pounds at $9.41 per pound. No such purchases were made in the same period
in 1999.
Corporate expenses consisting of general and administrative ("G&A")
expenses decreased to $826,000 in the first half of 2000 from $1,007,000 in the
first half of 1999. The lower G&A costs in 2000 reflect the continued focus on
reducing costs throughout all corporate levels and activities.
YEAR 2000 READINESS
The Company currently utilizes computer software in the management of
its operations and in accounting for its operating results that could be
affected by the date change in the year 2000 (the "Y2K issue"). All critical
information technology software and systems utilized by the Company has been
purchased from and are supported by third party vendors. The Company conducted a
review of the potential impact of the year 2000 on such system in 1999, and
concluded that it would not encounter significant operational or financial costs
related to compliance with this issue. The Company did not incur any adverse
impact related to the changeover to the year 2000.
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<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July 2000, the Company finalized its previously announced settlement
with the Liquidating Trustee in connection with the bankruptcy of Oren L. Benton
and certain of his affiliated companies. Under the settlement, the Trustee
released the Company from approximately $1.6 million in claims in exchange for
the Company releasing certain claims, assigning certain claims to the Trustee
and the issuance of the Company's $135,000 promissory note that requires no
payments until maturity on July 17, 2005 and is convertible by the Trustee into
shares of Common Stock at $0.75 per share. The note is secured by a deed of
trust covering the Company's Kingsville Dome and Rosita properties.
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.
(a) Exhibits
See the Index to Exhibits on page E-1 for a listing of the
exhibits that are filed as part of this Quarterly Report.
(b) None
13
<PAGE> 14
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: August 21, 2000 By: /s/ Paul K. Willmott
----------------------------
Paul K. Willmott
Director, President and
Chief Executive Officer
Dated: August 21, 2000 By: /s/ Thomas H. Ehrlich
-----------------------------
Thomas H. Ehrlich
Vice President - Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1* Restated Certificate of Incorporation of the Company, as amended
(filed with the Company's Annual Report on Form 10-K dated March
27, 1997).
3.2* Certificate Amendment to the Certificate of Incorporation dated
June 22, 1999 (filed with the Company's Quarterly Report on Form
10-Q dated August 12, 1999).
3.3* Restated Bylaws of the Company (filed with the Company's Form S-3
Registration No. 333-17875 on December 16, 1996).
4.1* Registration Rights Agreement dated March 25, 1997 between the
Company and Santa Fe Pacific Gold Corporation (filed with the
Company's Annual Report on Form 10-K dated March 27, 1997).
10.1* Amended and Restated Directors Stock Option Plan (filed with the
Company's Form S-8 Registration No. 333-00349 on January 22, 1996).
10.2* Amended and Restated Employee's Stock Option Plan (filed with the
Company's Form S-8 Registration No. 333-00403 on January 22, 1996).
10.3* 1995 Stock Incentive Plan (filed with the Company's Form S-8
Registration No. 333-00405 on January 22, 1996).
10.4* Non-Qualified Stock Option Agreement dated August 16, 1995, between
the Company and Leland O. Erdahl (filed with the Company's Annual
Report on Form 10-K dated March 27, 1996).
10.5* Non-Qualified Stock Option Agreement dated May 25, 1995, between
the Company and George R. Ireland (filed with the Company's Annual
Report on Form 10-K dated March 27, 1996).
10.6* Summary of Supplemental Health Care Plan (filed with Amendment No.
1 to the Company's Form S-1 Registration Statement (File No.
33-32754) as filed with the Securities and Exchange Commission on
February 20, 1990).
10.7* Note and Warrant Purchase Agreement entered into May 25, 1995 by
and among Lindner Investments, Lindner Dividend Fund and the
Company (filed with the Company's Current Report on Form 8-K dated
May 25, 1995).
10.8* Loan Agreement entered into June 18, 1996 by and between Lindner
Dividend Fund and the Company (filed with the Company's Annual
Report on Form 10-K dated March 27, 1997).
10.9* Agreement of Santa Fe Pacific Gold Corporation as Uranco, Inc.
Shareholder with the Company and Guarantee of the Company dated as
of March 25, 1997 (filed with the Company's Annual Report on Form
10-K dated March 27, 1997). (1)
10.10* Stock Exchange Agreement and Plan of Reorganization dated as of
March 25, 1997 (filed with the Company's Annual Report on Form 10-K
dated March 27, 1997).
</TABLE>
E-1
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.11* License to Explore and Option to Purchase dated March 21, 1997
between Santa Fe Pacific Gold Corporation and Uranco, Inc. (filed
with the Company's Annual Report on Form 10-K dated March 27,
1997).(1)
10.12* Amendment #1 to Nonqualified Stock Option Agreement dated November
17, 1997 between the Company and Leland O. Erdahl (filed with the
Company's Annual Report on Form 10-K dated March 27, 1998) .
10.13* Amendment #1 to Nonqualified Stock Option Agreement dated November
17, 1997 between the Company and George R. Ireland (filed with the
Company's Annual Report on Form 10-K dated March 27, 1998).
10.14* Compensation Agreement dated June 2, 1997 between the Company and
Paul K. Willmott (filed with the Company's Annual Report on Form
10-K dated March 27, 1998).
10.15* Compensation Agreement dated June 2, 1997 between the Company and
Richard A. Van Horn (filed with the Company's Annual Report on Form
10-K dated March 27, 1998).
10.16* Compensation Agreement dated June 2, 1997 between the Company and
Thomas H. Ehrlich (filed with the Company's Annual Report on Form
10-K dated March 27, 1998).
10.17* Compensation Agreement dated June 2, 1997 between the Company and
Mark S. Pelizza (filed with the Company's Annual Report on Form
10-K dated March 27, 1998).
10.18* Warrant to Purchase Common Stock for 625,000 shares dated March 23,
1998 between the Company and Lindner Investments (filed with the
Company's Annual Report on Form 10-K dated March 27, 1998).
10.19* Warrant to Purchase Common Stock for 325,000 shares dated March 23,
1998 between the Company and Lindner Investments (filed with the
Company's Annual Report on Form 10-K dated March 27, 1998).
10.20* Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed with
the Company's Annual Report on From 10-K dated March 31, 1999).
10.21* Note Exchange Agreement dated June 30,1999 between the Company and
Lindner Investments (filed with the Company's Quarterly Report on
Form 10-Q dated August 12, 1999).
10.22* 6.5% Secured Convertible Note for $1,500,000 dated June 30, 1999
between the Company and Lindner Investments (filed with the
Company's Quarterly Report on Form 10-Q dated August 12, 1999).
10.23* 6.5% Secured Convertible Note for $4,500,000 dated June 30, 1999
between the Company and Lindner Investments (filed with the
Company's Quarterly Report on Form 10-Q dated August 12, 1999).
27.1 Financial Schedule.
</TABLE>
*Incorporated by reference pursuant to Rule 12b-32 under the Securities
and Exchange Act of 1934, as amended.
