SPACEHAB Reports Financial Results for First Quarter Fiscal Year 2006.HOUSTON -- SPACEHAB, Incorporated (NASDAQ/NMS:SPAB SPAB Society for the Protection of Ancient Buildings (UK) SPAB School Pupil Activity Bus SPAB Supply Priorities and Allocations Board SPAB Security Policy Advisory Board SPAB Society for the Preservation of Adolescent Behavior ), a leading provider of commercial space services, today announced financial results for the first quarter ended September 30, 2005 of its fiscal year 2006. First Quarter Results SPACEHAB posted a first quarter fiscal 2006 net loss of $1.9 million, or ($0.15) per share, on revenue of $12.0 million compared with first quarter fiscal year 2005 net income of $7.0 million, or $0.55 per share, on revenue of $13.0 million. The Company was pleased to see the completion of the STS-114 space shuttle space shuttle, reusable U.S. space vehicle. Developed by the National Aeronautics and Space Administration (NASA), it consists of a winged orbiter, two solid-rocket boosters, and an external tank. mission during the quarter, but technical issues have impacted the launch dates of future missions. SPACEHAB management had anticipated a challenging quarter, partially due to a slow launch manifest at its Astrotech Space Operations subsidiary, but additional delays in the shuttle manifest, which includes work on the STS-121 and STS-116 missions, have transferred contract efforts from active mode to a standby, or maintenance, mode. The Company receives equitable adjustments under the contract for these missions to cover costs, but at lower margins. The Company expected to begin work this quarter on module processing for the STS-118 mission, but this effort has been temporarily deferred pending a firm return-to-flight schedule of the space shuttle. SPACEHAB was also prepared to conclude a commercial space access and microgravity mi·cro·grav·i·ty n. 1. An environment in which there is very little net gravitational force, as of a free-falling object, an orbit, or interstellar space. 2. research contract, known as JETIS, in support of the Japan Aerospace Exploration Agency The Japan Aerospace Exploration Agency (宇宙航空研究開発機構 this quarter, but customer requirements have delayed the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of this work. Astrotech took advantage of the projected processing hiatus hiatus /hi·a·tus/ (hi-a´tus) [L.] an opening, gap, or cleft.hia´tal aortic hiatus the opening in the diaphragm through which the aorta and thoracic duct pass. to begin facility upgrades in support of future missions awarded under the recently announced $4.9 million NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. payload (1) Refers to the "actual data" in a packet or file minus all headers attached for transport and minus all descriptive meta-data. In a network packet, headers are appended to the payload for transport and then discarded at their destination. processing contract. Additionally, customer-driven delays in the launch vehicle market in support of the GOES-N and Cloudsat/Calipso missions affected Astrotech operations. This was offset by additional revenue gained while the spacecraft are in Company facilities and through the provision of newly awarded non mission-specific services. In August 2005 NASA announced a target of May 2006 for the next space shuttle mission, STS-121, for which SPACEHAB is contracted to provide a cargo carrier and related integration and operations services. The Company expects the delay of this and other missions to have marginal impact on revenues and margins over the coming months as SPACEHAB continues the mission-specific work and receives revenue for its asset maintenance fees. Liquidity SPACEHAB's cash and short-term investments were approximately $6.9 million as of September 30, 2005. The Company expects to utilize existing cash, advances available under the Company's $5.0 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, and cash anticipated from future operations for research and development activities as well as for new business initiatives. As of September 30, 2005 SPACEHAB had no advances outstanding against its credit facility. Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. decreased to $20.4 million at September 30, 2005 compared to $20.5 million at June 30, 2005 due to reductions in accounts payable and accrued expense Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. . As of September 30, 2005 SPACEHAB carried a contract backlog of $75.9 million, which represents the expected value Expected value The weighted average of a probability distribution. Also known as the mean value. of contractually-committed work, portions of which are subject to the space shuttle's return to flight or future government funding decisions. On July 21, 2005 SPACEHAB filed Form S-4 "Registration Statement" with the Securities and Exchange Commission which outlined the terms of an offer to exchange existing 8.0% convertible subordinated notes due in 2007, which became effective September 2, 2005. On October 20, 2005 a post-effective amendment to the terms of the offer was filed in which the terms were restated that the Company intended to exchange its 8.0% convertible subordinated notes due in 2007 for 5.5% senior convertible notes due in 2010 with a conversion price of $1.50 per share. The offer is to expire on November 16, 2005. A special meeting of shareholders will be held on November 10, 2005 to decide on certain matters related to the exchange offer. On March 25, 2003 the Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the Company to repurchase up to $1.0 million of the Company's outstanding common stock at market prices. Any purchases under the Company's stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program may be made from time to time, in the open market, through block trades or otherwise in accordance with applicable regulations of the SEC. For the quarter ended September 30, 2005, SPACEHAB did not repurchase any shares but has repurchased 116,100 shares at a cost of $117,320, or an average price of $1.01 per share, under the program to date. Update of Ongoing Operations SPACEHAB's priority for the remainder of the fiscal year is on innovation and technical excellence, securing new business, forging strategic partnerships, and expanding our core capability. The Company continues to focus on remaining an affordable, capable, and dependable supplier of commercial space services while generating profit and attaining the success it seeks in a highly competitive industry. The Company is conducting a detailed assessment of the commercial and government space application markets, identifying specific customer space access requirements. SPACEHAB is preparing for major solicitations in support of NASA's commercial International Space Station resupply re·sup·ply tr.v. re·sup·plied, re·sup·ply·ing, re·sup·plies To provide with fresh supplies, as of weapons and ammunition. re requirements and procurements associated with the Vision for Space Exploration. One such procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. is NASA's Commercial Orbital orbital Mathematical expression, called a wave function, that describes properties characteristic of no more than two electrons near an atomic nucleus or molecule. An orbital can be considered a three-dimensional region in which there is a 95% probability of finding an Transportation Service solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual expected to be released in December with a potential award in May 2006. In preparation for this procurement, SPACEHAB is establishing partnerships and securing suppliers in order to construct an operationally-viable and affordable commercial solution for supplying a high-value logistics service to the International Space Station. This is a program for which the Company is aptly prepared to lead for NASA. In future periods SPACEHAB will be expending additional funds on bid and proposal efforts for new opportunities both in the commercial and government space markets. SPACEHAB Flight Services (SFS (1) (Self-certifying File System) A global, network file system sponsored by DARPA that runs under Unix. Providing strong security in an untrusted environment, it enables any client to access any server that supports it. ) continues to generate revenue by providing space shuttle-based, turnkey services that include customer access to space via a family of pressurized pres·sur·ize tr.v. pres·sur·ized, pres·sur·iz·ing, pres·sur·iz·es 1. To maintain normal air pressure in (an enclosure, as an aircraft or submarine). 2. modules and unpressurized pallet carriers; integration and operations support to logistics suppliers transporting cargo aboard SPACEHAB carriers to and from the orbiting ISS ISS See Institutional Shareholder Services (ISS). ; and integration and operations support to scientists and technologists responsible for experiments performed aboard module and pallet research platforms. SFS is under contract to provide SPACEHAB's single module as well as its Integrated Cargo Carriers (ICCs) in support of three of the next five logistics missions to the ISS: STS-121, STS-116, and STS-118, in order of scheduled launch dates. Astrotech Space Operations (ASO ASO arteriosclerosis obliterans. ASO 1 Administrative services organization, see there 2 Allele-specific–oligonucleotide hybridization 3 Anti-streptolysin O, see there ) provides expert services and facilities to its customers in support of the final assembly, checkout, and countdown functions associated with preparing a spacecraft for launch. This preparation includes the final assembly and checkout of the spacecraft, check-out and installation of the solid rocket motors, loading of the liquid propellants Any liquid combustible fed to the combustion chamber of a rocket engine. , encapsulation (1) In object technology, the creation of self-contained modules that contain both the data and the processing. See object-oriented programming. (2) The transmission of one network protocol within another. of the satellite in the launch vehicle payload fairings, and command and control of the spacecraft during pre-launch countdown. During the quarter ASO was awarded a new NASA contract valued at up to $4.9 million to provide payload processing services from the Company's high-tech facilities in Titusville, Florida Titusville is a city in Brevard County, Florida, United States. The population was 40,670 at the 2000 census. According to the U.S. Census Bureau's 2004 estimates, the city had a population of 42,614. It is the county seat of Brevard CountyGR6. . SPACEHAB Government Services (SGS SGS Société Générale de Surveillance SGS Symantec Gateway Security (appliance) SGS School of Graduate Studies SGS Subgrid Scale SGS Singapore Government Securities SGS Shell Global Solutions ) continues to provide support to NASA in the areas of large-scale configuration and data management programs such as the International Space Station; specialized hardware design, development, and fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. ; and safety and quality support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . SGS has been supporting a five-year International Space Station program management initiative of which over three years remains on the contract. NASA has the option to issue two one-year contract options that could expand the overall contract to seven years. Conference Call SPACEHAB will host a conference call at 10:00 a.m. Central time following the earnings release. During the call management will discuss the Company's first quarter financial results as well as other recent and potential future developments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc SPACEHAB. To participate on the call please dial 866-411-4706 (domestic calls) or 678-460-1867 (international calls). A taped replay will be available following the conference call until 11:59 p.m. Eastern time on November 9, 2005 at 866-453-6660 (domestic calls) or 678-460-1866 (international calls) via access code 207552. To hear a replay of the call via the Internet, visit the Investor Information section of the SPACEHAB website at www.spacehab.com. This audio archived webcast of the conference call is available on the Company website for approximately one year. Annual Shareholders Meeting SPACEHAB's Annual meeting of Shareholders is scheduled for December 1, 2005 at 10:00 a.m. Central time. The meeting will be held at SPACEHAB's corporate office located at 12130 Highway 3, Building 1, Webster, TX 77598. HOLDERS OF THE NOTES AND OTHER INTERESTED PARTIES ARE ENCOURAGED TO CAREFULLY READ THOSE MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE OFFER TO EXCHANGE AND CONSENT SOLICITATION Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with . This announcement is not an offer to purchase or a solicitation of an offer to purchase with respect to any securities. The exchange offer and consent solicitation is being made solely by the prospectus filed with the Securities and Exchange Commission. About SPACEHAB, Incorporated SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial and government space services with three primary business units. The Flight Services business unit develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA's Space Shuttles The term Space Shuttles refers to partly or fully reusable launch vehicles for regularly placing payloads into low earth orbit. See:
The statements in this document may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, continued government support and funding for key space programs, product performance and market acceptance of products and services, as well as other risk factors and business considerations described in the company's Securities & Exchange Commission filings including the annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements. Tables follow
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except share data)
Three Months
Ended September 30,
------------------------------
2005 2004
--------------- --------------
Revenue $11,985 $13,033
Costs of revenue 10,212 10,786
--------------- --------------
Gross profit 1,773 2,247
--------------- --------------
Operating expenses
Selling, general and administrative 2,280 1,966
Research and development 78 7
Nonrecurring items, net loss
(recovery) related to RDM - (8,244)
--------------- --------------
Total operating expenses 2,358 (6,271)
--------------- --------------
Income from operations (585) 8,518
Interest expense (1,408) (1,458)
Interest and other income, net 109 41
--------------- --------------
Income before income taxes (1,884) 7,101
Income tax expense (32) (142)
--------------- --------------
Net income $(1,916) $6,959
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Income per share:
Net income per share--basic $(0.15) $0.55
=============== ==============
Shares used in computing net income per
share--basic 12,671,576 12,574,224
=============== ==============
Net income per share--diluted $(0.15) $0.49
=============== ==============
Shares used in computing net income per
share--diluted 12,671,576 14,247,860
=============== ==============
Condensed Consolidated Balance Sheets
(In thousands) September 30, June 30,
2005 2005
ASSETS (unaudited)
--------------- --------------
Cash and cash equivalents $6,897 $8,297
Accounts receivable, net 15,898 16,906
Prepaid expenses and other current
assets 701 693
--------------- --------------
Total current assets 23,496 25,896
Property and equipment, net of
accumulated depreciation and
amortization of $53,467 and $52,224,
respectively 73,045 73,647
Other assets, net 2,949 2,408
--------------- --------------
Total assets $99,490 $101,951
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $20,420 20,461
--------------- --------------
Long-term liabilities 66,056 66,693
Stockholders' equity 13,014 14,797
--------------- --------------
Total liabilities and stockholders'
equity $99,490 $101,951
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