SPACEHAB Reports Financial Results for Second Quarter Fiscal Year 2005.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 ) Highlights --Net loss of $1.2 million for the quarter, net income of $5.7 million for the fiscal year to date --Achieved second quarter revenue of $13.1 million even with the 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. grounded and a slip in an Astrotech-supported mission at Sea Launch --Cash plus short-term investments of $6.6 million SPACEHAB, Incorporated (NASDAQ/NMS:SPAB), a leading provider of commercial space services, today announced financial results for its second quarter fiscal year 2005 ended December 31, 2004. Second Quarter Results SPACEHAB posted a second quarter fiscal 2005 net loss of $1.2 million, or ($0.10) per share (($0.10) per diluted share), on revenue of $13.1 million compared with prior year quarter net income of $3.5 million, or $0.28 per share ($0.25 per share diluted), on revenue of $32.8 million. "Although our contributions to NASA's space shuttle program remained 'on hold' through most of our second quarter fiscal 2005 results, we enter our third quarter contracted to undertake new work associated with NASA's return to flight scheduled for May or June 2005," stated Brian K. Harrington, SPACEHAB Senior Vice President, Finance and Chief Financial Officer. "In January SPACEHAB was provided authority to proceed with mission-specific work on space shuttle mission STS-116 and authorized new contract work to add a deployable stowage STOWAGE, mar. law. The proper arrangement in a ship, of the different articles of which a cargo consists, so that they may not injure each other by friction, or be damaged by the leakage of the ship. 2. platform to STS-118 that will hold spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. on the International Space Station." Revenue this quarter was impacted by the past year's postponement of space shuttle missions <onlyinclude> This is a list of missions flown by space shuttles. As of 2006, only the United States has flown human spaceflight shuttle missions, in the Space Shuttle program, while the Soviet Union flew one unmanned flight of the Buran. pending resolution of all issues addressed in the Columbia Accident Investigation Board The Columbia Accident Investigation Board (CAIB) was convened by NASA to investigate the destruction of the Space Shuttle Columbia upon atmospheric re-entry on February 1, 2003. report. Now that NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. has initiated mission-specific work under our contracts, the Company will begin to recognize integration and operations revenue as mission milestones are met. Additionally, a portion of the revenue anticipated from SPACEHAB's Astrotech Space Operations subsidiary was delayed two quarters due to a customer slip in their mission launch schedule. These missions have since been rescheduled to launch during the Company's third fiscal quarter ending March 31, 2005 and subsequent periods. Revenue for the second quarter of fiscal 2005 compared to 2004 decreased approximately $19.7 million as the previous year's quarter benefited from receipt of a $17.5 million one-time payment related to the termination of financial guarantees in the long-term payload processing contract between Astrotech and The Boeing Company (NYSE NYSE See: New York Stock Exchange :BA). These guarantees were terminated due to Boeing's assessment of the lack of predictability of future satellite launches. Since this time, the Company has been awarded new payload processing contracts by Boeing on a mission-by-mission basis. Selling, general and administrative expenses declined to approximately $2.3 million for the second quarter 2005 compared to $3.4 million for the same period a year ago. This improvement in selling, general and administrative expenses is reflective of ongoing cost reduction efforts by the company. The second quarter 2005 selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. also include legal expenses incurred on the claims with NASA for losses of equipment on the Space Shuttle Columbia accident. "Operations have produced a solid foundation for profitability as business and industry conditions improve," said Harrington. Meanwhile, we remain focused on costs and growth opportunities in the commercial space exploration arena, including continued work on NASA's Concept Exploration and Refinement effort." Subsequent to quarter end, NASA notified the Company of its intent to exercise its option to extend this lunar exploration lunar exploration: see space exploration. contract initiative. Once under contract, this six month effort will be valued at approximately $1.0 million in revenue. Six Month Results SPACEHAB's six months ended December 31, 2004 net income was $5.7 million, or $0.45 per share ($0.40 per share diluted), on revenue of $26.2 million compared to $4.1 million, or $0.33 per share or ($0.30 per share diluted), on revenue of $51.7 million for first six months of the prior fiscal year. As mentioned, six months revenue for this fiscal year was impeded due to the grounding of the space shuttle and a slip in an Astrotech-supported mission originally scheduled to launch during the second quarter. The significant decline in revenue for the comparable six month period reflects the transition from the ReALMS contract structure for our space shuttle operations to our current structure; the one-time termination payment of financial guarantees for $17.5 million; and the completion of two NASA contracts in 2003. This was somewhat offset by revenue generated in 2004 for mission-specific work on the space shuttle return to flight, the JETIS contract, as described below, and other new activities. Six months results include the recovery of $8.0 million from NASA in October 2004 for the loss of SPACEHAB's Research Double Module (RDM RDM Ring Deutscher Makler (German Realty Association) RDM Red Mage (Final Fantasy, gaming) RDM Remote Device Management (protocol used in theatre lighting equipment) ) on the STS-107 space shuttle accident. The recovery, along with $0.2 million of interest, was reflected in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying for the first quarter fiscal year 2005. The cash settlement of the receivable was received in the second quarter. Selling, general and administrative expenses declined to $4.2 million for the six months of fiscal 2005 compared to $6.3 million for the same period a year ago. Interest expense was approximately $2.9 million for the six months ended December 31, 2004 compared to approximately $4.6 million for the six months ended December 31, 2003. The decrease in interest expense is due primarily to the restructuring of the financing of SPACEHAB's Spacecraft Processing Facility in January 2004, reducing the facility mortgage by approximately $11.0 million and eliminating the hedge accounting Why is hedge accounting necessary? Many financial institutions and corporate businesses (entities) use derivative financial instruments to hedge their exposure to different risks (eg interest rate risk, foreign exchange risk, commodity risk, etc). on a portion of the interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. . The mortgage was restructured with a principal balance of $5.6 million, a reduced effective interest rate from 7.87% to a fixed rate of 5.5%, and a shortened maturity date of January 2007. Liquidity The Company's cash and short-term investments were approximately $6.6 million as of December 31, 2004. As mentioned, in October 2004 the Company received $8.2 million from NASA in indemnification of losses suffered in the Space Shuttle Columbia accident. This payment was recorded as an account receivable account receivable Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis. Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. in the first quarter and received in the second quarter. Deferred revenue as of December 31, 2004 was reduced to $2.6 million compared to $7.2 million at June 30, 2004. The decrease is primarily due to the successful execution of a commercial contract, JETIS, with the Japan Aerospace Exploration Agency The Japan Aerospace Exploration Agency (宇宙航空研究開発機構 (JAXA JAXA Japan Aerospace Exploration Agency ) where SPACEHAB provided for the delivery of a thermal incubator system to the ISS ISS See Institutional Shareholder Services (ISS). via the Russian Progress for one of its international customers. For the three and six months ended December 31, 2004, the Company recognized revenue of approximately $0.3 million and $1.8 million, respectively under this contract. Additionally, during fiscal year 2004 the ReALMS contract was closed and replaced with the current subcontract arrangement with Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. Corporation, resulting in a decrease in deferred revenue. 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 $15.2 million at December 31, 2004 compared to $22.3 million at June 30, 2004 mainly due to reductions in current deferred revenue, accounts payable, and accrued expenses. As of December 31, 2004, SPACEHAB carried a contract backlog of $82.2 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, a portion of which is subject to return to flight of the space shuttle. Update of Ongoing Operations "SPACEHAB expects to remain a key player in the remaining shuttle program missions, continue to support the ISS cargo transportation and research needs throughout its lifetime - and from a variety of launch platforms - and, carve out a critical path niche for our company in support of NASA's emerging exploration initiative," stated Michael E. Kearney, SPACEHAB President and Chief Executive Officer. "We are currently under contract in all three of these domains so we are confident that we will continue to provide high value, commercial services to all of our clients." 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 provide logistics capabilities and assets in support of the International Space Station (ISS) program. SFS is under contract for use of SPACEHAB's single module as well as its Integrated Cargo Carriers (ICCs) to support four logistics missions to the ISS: STS-114, STS-121, STS-116, and STS-118, in order of scheduled launch dates. Support for STS-121, 116, and 118 continue under subcontract to Lockheed Martin. SPACEHAB is currently providing asset maintenance and related services under letter contract and is in final contract negotiations with Lockheed for this contract. Subsequent to quarter end, SPACEHAB received authorization to proceed on integration and operations activities for the STS-116 mission which officially kicked off a 13-month processing template for this flight, which includes a SPACEHAB 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. single module and an unpressurized ICC ICC See: International Chamber of Commerce . Expanding upon Noun 1. expanding upon - adding information or detail expansion step-up, increase - the act of increasing something; "he gave me an increase in salary" its service capabilities, SFS recently received confirmation of a flight opportunity aboard the European Space Agency's Automated Transfer Vehicle An Automated Transfer Vehicle or ATV is an unmanned resupply spacecraft developed by the European Space Agency (ESA)[1]. ATVs are designed to supply the International Space Station with propellant, water, air, payload and experiments. (ATV (1) (Advanced TV) An early name for the digital TV standard proposed by the Advisory Committee on Advanced Television Service (ACATS). See ACATS. See also ATV Forum. (2) (Analog TV) Refers to the NTSC, PAL and SECAM analog TV standads. ) and is currently seeking a qualified customer to utilize this unique flight to the ISS. Commercial access to this vehicle expands SPACEHAB's growing operations on a variety of manned and unmanned spacecraft for use by customers worldwide, including the Japan Aerospace Exploration Agency (JAXA), currently utilizing a SPACEHAB-provided incubator aboard the ISS Russian Segment. The incubator was launched and transported to the ISS, under contract to SPACEHAB, aboard a Russian Progress vehicle. SFS also expects to participate on a Japanese team bidding for the job of privately operating the country's Japanese Experiment Module The Japanese Experiment Module (JEM) Kibō (希望, Hope) is the Japanese contribution to the International Space Station and is produced by Japan Aerospace Exploration Agency (JAXA). It is the largest module for the ISS. . The JAXA contract award on this procurement is expected as early as 2006. After the first quarter 2005 scheduled downtime scheduled downtime Informatics A planned, suspension of one or more computer functions to perform maintainance or enhance system operations. Cf Extended downtime. , Astrotech moved into high gear with the arrival of NASA's Deep Impact spacecraft at the Company's 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. location. With a successful liftoff on January 12, 2005, Deep Impact is comprised of two parts, a fly-by fly·by also fly-by n. pl. fly·bys A flight passing close to a specified target or position, especially a maneuver in which a spacecraft or satellite passes sufficiently close to a body to make detailed observations without spacecraft and a smaller impactor, a copper projectile projectile something thrown forward. projectile syringe see blow dart. projectile vomiting forceful vomiting, usually without preceding retching, in which the vomitus is thrown well forward. that is scheduled to collide with the comet Tempel Comet Tempel may mean:
The Astrotech-processed AMC-16 spacecraft, a hybrid Ku/Ka-band satellite built by Lockheed Martin Commercial Space Systems and the first of its kind to be housed on an Atlas V This article is about the rocket. For the boat, see Atlas V (boat). The Atlas V rocket is an expendable launch vehicle formerly built by Lockheed Martin and now built by the Lockheed Martin-Boeing joint venture United Launch Alliance. launch vehicle, successfully launched during the quarter in December 2004. The AMC-16 satellite, like its twin AMC-15, is integral to AMERICOM2Home and its customer, EchoStar's DISH Network See DBS. . December also saw the successful launch of the Boeing Delta IV Heavy Demonstration mission from Cape Canaveral Air Force Station The Cape Canaveral Air Force Station (CCAFS) is the East Coast space launch facility of the United States Department of Defense. Located on Cape Canaveral in the State of Florida, it depends on Patrick Air Force Base, home of the 45th Space Wing. CCAFS is adjacent to the John F. for the U.S. Air Force. The payload simulator and five-meter payload fairing for this flight were processed in Astrotech's Spacecraft Processing Facility. This mission represented the first launch of heavy configuration of the Boeing Delta IV family of launch vehicles. SPACEHAB Government Services continues to provide configuration management services within the Program Integration and Control (PI&C) contract supporting the ISS program. This five-year initiative, awarded this time last year, was valued at approximately $22.0 million for SPACEHAB. Additionally, if exercised, there are two one-year contract options that would increase the award by an additional $10.0 million. The PI&C team achieved an overall award fee evaluation of 'excellent' from NASA for its performance during the first contract year. 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 second quarter financial results as well as other recent and potential future developments relating to SPACEHAB. To participate on the call, please dial 800.473.8493 (domestic calls) or 816.650.0756 (international calls) and ask for the SPACEHAB Earnings Conference. A taped replay will be available following the conference call and accessible via access code 35553677 until 11:59 p.m. Eastern time on February 10, 2005 at 800.252.6030 (domestic calls) or 402.220.2491 (international calls). 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 will be available on the Company website for approximately one year. 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 for 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 and research purposes. SPACEHAB's Astrotech subsidiary provides payload processing support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services for both commercial and government customers at company-owned facilities in Florida and California. The Company's Government Services business unit supports NASA's Johnson Space Center providing configuration management, product engineering, and support services for both the Space Station and Space Shuttle programs. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com). The statements in this document may contain forward-looking statements 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 Six Months
Ended December 31, Ended December 31,
-----------------------------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenue $13,138 $32,816 $26,171 $51,666
Costs of revenue 10,721 12,830 21,507 26,357
----------- ----------- ----------- -----------
Gross profit 2,417 19,986 4,664 25,309
----------- ----------- ----------- -----------
Operating expenses
Selling, general
and administrative 2,269 3,403 4,235 6,335
Research and
development 8 2 16 2
Goodwill impairment - 8,274 - 8,274
Impairment of
investment in
Guigne - 1,800 - 1,800
Recovery of
nonrecurring
charge, loss of
Research Double
Module - - (8,244) -
----------- ----------- ----------- -----------
Total
operating
expenses 2,277 13,479 (3,993) 16,411
----------- ----------- ----------- -----------
Income from
operations 140 6,507 8,657 8,898
Interest expense (1,428) (2,859) (2,886) (4,599)
Interest and other
income, net 39 42 81 75
----------- ----------- ----------- -----------
Income (loss) before
income taxes (1,249) 3,690 5,852 4,374
Income tax expense - (222) (142) (240)
----------- ----------- ----------- -----------
Net income (loss) $(1,249) $3,468 $5,710 $4,134
=========== =========== =========== ===========
Income (loss) per
share:
Net income (loss) per
share - basic $(0.10) $0.28 $0.45 $0.33
=========== =========== =========== ===========
Shares used in
computing net income
(loss) per share -
basic 12,609,863 12,401,291 12,592,044 12,386,123
=========== =========== =========== ===========
Net income (loss) per
share - diluted $(0.10) $0.25 $0.40 $0.30
=========== =========== =========== ===========
Shares used in
computing net income
(loss) per share -
diluted 12,609,863 13,897,126 14,200,519 13,810,998
=========== =========== =========== ===========
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
December 31, June 30,
2004 2004
(unaudited)
-------------------------
ASSETS
Cash and cash equivalents, including
restricted amounts of $558 and $430 $558 $936
Investments, including restricted amounts of
$0 and $1,604 6,056 6,641
Accounts receivable, net 8,109 7,878
Prepaid expenses and other current assets 957 495
------------ ------------
Total current assets 15,680 15,950
Property, plant, and equipment, net of
accumulated depreciation and amortization 77,598 79,600
Other assets, net 3,375 4,375
------------ ------------
Total assets $96,653 $99,925
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $15,247 $22,301
Long-term liabilities 66,247 68,214
Stockholders' equity 15,159 9,410
------------ ------------
Total liabilities and stockholders'
equity $96,653 $99,925
============ ============
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