SPACEHAB Reports Financial Results for Third 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 ), a leading provider of commercial space services, today announced financial results for the third quarter ended March 31, 2005 of its fiscal year 2005. Third Quarter Results SPACEHAB posted a third quarter fiscal 2005 net loss of $0.5 million, or ($0.04) per share, on revenue of $14.3 million compared with third quarter fiscal year 2004 net income of $0.3 million, or $0.02 per share, on revenue of $14.8 million. "During the third quarter we continued to prepare for NASA's return to flight of 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. ," stated Michael E. Kearney, SPACEHAB President and Chief Executive Officer. "Although NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. has recently deferred the launch date to mid July, we are completing work for the STS-114 mission scheduled as the space shuttle's return to flight, as well as mission-specific work on STS-121 and STS-116." Kearney continued, "We are also proceeding with new 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 that will be affixed af·fix tr.v. af·fixed, af·fix·ing, af·fix·es 1. To secure to something; attach: affix a label to a package. 2. to the International Space Station next year during the STS-118 mission and used for 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. storage." In addition to the space shuttle mission revenues, SPACEHAB's Astrotech Space Operations revenue improved in the third quarter. This was primarily due to the commencement of processing activities on several missions that had been deferred from the second quarter to the third quarter due to slips in the customers' launch schedules. With payload processing activities supported at all Astrotech operating locations, seven spacecraft underwent processing with three of those successfully launched during the third quarter. "NASA's rescheduling of the space shuttle launch to mid July 2005 is expected to have a small impact on our revenues and margins in the third and fourth quarters," stated Brian K. Harrington, SPACEHAB Senior Vice President and Chief Financial Officer. "However, we are generally reimbursed under the contract for additional costs due to delays once we begin mission-specific work," added Harrington. Nine Month Results SPACEHAB's net income for the nine months ended March 31, 2005 was $5.2 million, or $0.36 per share, on revenue of $40.4 million compared to $4.4 million, or $0.31 per share, on revenue of $66.5 million for first nine months of the prior fiscal year. The prior fiscal year results included the one-time termination payment of financial guarantees of $17.5 million in the Company's Astrotech subsidiary, impairment of goodwill of $8.3 million, and an impairment on an investment of $1.8 million, while the current fiscal year includes the recovery of $8.2 million from NASA 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 which occurred prior to the third quarter. Liquidity SPACEHAB's cash and short-term investments were approximately $6.0 million as of March 31, 2005. In February 2005 the Company entered into a new 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 providing up to $5.0 million secured by 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 . This new bank facility replaced the previous revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. which was secured by pledged cash and invested cash assets. As of March 31, 2005 SPACEHAB had no advances outstanding against this facility. Deferred revenue as of March 31, 2005 was reduced to $2.4 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 where SPACEHAB provided for the delivery of a thermal incubator system to the International Space Station (ISS ISS See Institutional Shareholder Services (ISS). ) via the Russian Progress. For the three and nine months ended March 31, 2005, the Company recognized revenue of approximately $0.6 million and $2.7 million, respectively, under this contract. 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 $15.3 million at March 31, 2005 compared to $22.3 million at June 30, 2004 due to reductions in current deferred revenue, accounts payable, and repayment of the revolving loan payable outstanding at the end of the prior fiscal year. As of March 31, 2005 SPACEHAB carried a contract backlog of $81.9 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. As announced in May 2005, the Company closed on a sale-leaseback transaction for the SPACEHAB Payload Processing Facility in Cape Canaveral, Florida This article is about the city of Cape Canaveral, Florida. For the site neighboring the Kennedy Space Center, see Cape Canaveral. Cape Canaveral is a city in Brevard County, Florida, United States. The population was 8,829 at the 2000 census. . This transaction will generate cash to further improve liquidity while providing attractive lease arrangements. As SPACEHAB transitions to serving NASA's emerging needs under the National Vision for Space Exploration, this lease offers the flexibility to respond to new opportunities and optimize our facility requirements for both the Cape Canaveral Cape Canaveral (kənăv`ərəl), low, sandy promontory extending E into the Atlantic Ocean from a barrier island, E Fla., separated from Merritt Island by the Banana River, a lagoon; named (1963) Cape Kennedy in memory of President John and 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. locations. Update of Ongoing Operations "As a forward-thinking company focused on high value commercial access to space, it is critical that we are on the forefront of innovation while remaining a leading force in helping people work and live in space," said Kearney. "As a result, each of our business units continues to advance our proven capabilities in support of International Space Station logistics, space exploration 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 support of commercial human space initiatives," added Kearney. 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 ISS program. SFS is under contract to provide SPACEHAB's single module as well as its Integrated Cargo Carriers (ICCs) in support of four logistics missions to the ISS: STS-114, STS-121, STS-116, and STS-118, in order of scheduled launch dates. Support to STS-114 continues under contract to the ISS prime contractor, The Boeing Company (NYSE NYSE See: New York Stock Exchange :BA), and support for STS-121, 116, and 118 continues under subcontract to 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 (NYSE:LMT LMT left mentotransverse (position of fetus). ). SPACEHAB is currently providing asset maintenance and related services under letter contract and is in final contract negotiations with Lockheed for this contract. In support of ISS operations during the shuttle's downtime, SFS helped ship over 1,200 pounds of food containers and crew provisions from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. to Russia. Launched onboard the Russian 17P Progress mission, goods ranged from personal hygiene personal hygiene person n → Körperhygiene f items to a replacement heat exchanger heat exchanger Any of several devices that transfer heat from a hot to a cold fluid. In many engineering applications, one fluid needs to be heated and another cooled, a requirement economically accomplished by a heat exchanger. , all delivered for use by the ISS Expedition 10 and 11 crews. During the quarter NASA exercised the Company's six-month exploration contract option, valued at approximately $1.0 million, for the phase two extension of the Concept Exploration and Refinement contract. This contract gave SPACEHAB the opportunity to identify systems and an architecture that support human lunar exploration, while being extensible to Mars missions and other destinations. This new option period, scheduled through August 2005, allows the Company to continue and expand upon the work completed over the previous six month contract period. Astrotech saw the successful launch of three spacecraft in the third quarter, all processed at Company owned or operated facilities in both Florida and California. January 12, 2005 was the liftoff date for NASA's Deep Impact. Reports show that the spacecraft is on target for a July 4, 2005 scheduled collision with the comet Tempel 1. Astrotech supported the processing and February 28, 2005 launch of the XM(Radio)-3 satellite on a Zenit-3SL vehicle from the Sea Launch platform at the equator. Finally, the Inmarsat-4 PFM spacecraft lifted off onboard an Atlas V 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. after processing and 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. at Astrotech's Florida facilities. March 2005 saw the arrival of the Boeing Satellite Systems' GOES-N spacecraft at Astrotech Florida in preparation for a June 2005 launch on a Boeing Delta IV launch vehicle. Once the processing is completed and the vehicle transported to the launch pad, the Florida facilities will undergo a scheduled major maintenance period in anticipation of a heavy mission load beginning at year's end. At Astrotech's Vandenberg location, the team was readying the facilities for the arrival of NASA's CALIPSO CALIPSO Cloud-Aerosol Lidar and Infrared Pathfinder Satellite Observations and CloudSat spacecraft. At the Sea Launch Home Port, Astrotech supported the processing of the Spaceway 1 satellite which launched subsequent to quarter end. During the quarter, Astrotech was awarded a new payload processing contract with a value of $2.5 million supplying payload processing services in support of U.S. Government missions. 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 configuration management services within the Program Integration and Control contract supporting the ISS program. The SGS Project Engineering and Fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. team led two successful initiatives in support of the ISS program. First, the team fabricated and assembled the next generation of intra-vehicular activity handrails. The 175 handrails were developed and tested for transport to, and final installation on, ISS Nodes 2 and 3 and the 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. . Second, the team fabricated, assembled and tested a crew training mockup mock·up also mock-up n. 1. A usually full-sized scale model of a structure, used for demonstration, study, or testing. 2. A layout of printed matter. and flight versions of a custom mounting plate which will enable two pieces of critical ISS hardware to be attached to SPACEHAB's ICC ICC See: International Chamber of Commerce on space shuttle mission STS-121, and transferred to the ISS. 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 third quarter financial results as well as other recent and potential future developments relating to SPACEHAB. To participate on the call, please dial 866-613-5217 (domestic calls) or 678-460-1862 (international calls) and when prompted, enter the pin code 6661193 followed by the pound (#) key. A taped replay will be available following the conference call until 11:59 p.m. Eastern time on May 11, 2005 at 866-453-6660 (domestic calls) or 678-460-1866 (international calls) via access code 165119. 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 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 Nine Months
Ended March 31, Ended March 31,
-----------------------------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenue $14,272 $14,800 $40,443 $66,466
Costs of revenue 11,085 9,815 32,592 36,172
----------- ----------- ----------- -----------
Gross profit 3,187 4,985 7,851 30,294
----------- ----------- ----------- -----------
Operating expenses
Selling, general and
administrative 2,321 2,545 6,556 8,880
Research and
development 21 7 37 9
Goodwill impairment - - - 8,274
Impairment of
investment in Guigne - - - 1,800
Recovery of
nonrecurring charge,
loss of Research
Double Module - - (8,244) -
----------- ----------- ----------- -----------
Total operating
expenses 2,342 2,552 (1,651) 18,963
----------- ----------- ----------- -----------
Income from
operations 845 2,433 9,502 11,331
Interest expense (1,413) (2,177) (4,299) (6,776)
Interest and other
income, net 40 22 121 97
----------- ----------- ----------- -----------
Income (loss) before
income taxes (528) 278 5,324 4,652
Income tax expense (13) (11) (155) (251)
----------- ----------- ----------- -----------
Net income (loss) $(541) $267 $5,169 $4,401
=========== =========== =========== ===========
Income (loss) per
share:
Net income (loss) per
share - basic $(0.04) $0.02 $0.41 $0.35
=========== =========== =========== ===========
Shares used in
computing net income
(loss) per share -
basic 12,626,130 12,476,342 12,603,240 12,415,977
=========== =========== =========== ===========
Net income (loss) per
share - diluted $(0.04) $0.02 $0.36 $0.31
=========== =========== =========== ===========
Shares used in
computing net income
(loss) per share -
diluted 12,626,130 14,264,818 14,203,597 14,039,798
=========== =========== =========== ===========
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share data)
March 31, June 30,
2005 2004
ASSETS (unaudited)
----------- -----------
Cash and cash equivalents, including
restricted amounts $872 and $430 $5,994 $963
Investments, including restricted amounts
of $0 and $1,604 - 6,641
Accounts receivable, net 9,459 7,878
Prepaid expenses and other current assets 895 495
----------- -----------
Total current assets 16,348 15,950
Property and equipment, net of accumulated
depreciation and amortization 76,530 79,600
Other assets, net 2,847 4,375
----------- -----------
Total assets $95,725 $99,925
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 15,291 22,301
Long-term liabilities 65,749 68,214
Stockholders' equity 14,685 9,410
----------- -----------
Total liabilities and stockholders' equity $95,725 $99,925
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