SpaceDev, Inc. (OTC BB: SPDV.OB) reported its
financial results for the year ended December 31, 2006.
The Company
recorded its third consecutive year of revenue growth reaching
over $32
million for the year ending 2006. The Company also reported
its third
consecutive year of positive EBITDA.
“The acquisition of the Starsys Research Corporation fundamentally
expanded
our profile and has provided us with a substantial manufacturing
operation,
which will become critical in the coming years. We have
grown ten-fold
over the past few years through internal growth and acquisition,”
said Mark
N. Sirangelo, SpaceDev’s Chairman of the Board and Chief
Executive Officer.
“We continue to successfully integrate the SpaceDev and
Starsys businesses.
We have also relocated the Starsys operation into a new
facility in Boulder
County, Colorado, which is designed for operating efficiencies
to drive
profitability, as well as provide additional capacity for
our future growth
plans.”
For the fiscal year ended December 31, 2006, SpaceDev’s
revenue was
approximately $32.6 million, an increase of 250%, compared
to approximately
$9.0 million for 2005. The increase in revenue was due primarily
to the
acquisition of Starsys in January 2006; Starsys generated
revenues from
February 1, 2006 through December 31, 2006 of approximately
$21.4 million,
excluding approximately $300,000 of inter-company sales.
“During 2006, we substantially grew our Company from internal
programs and
through the merger with Starsys,” said Richard B. Slansky,
SpaceDev’s
President and Chief Financial Officer. “We committed our
resources in 2006
to the successful turn-around and growth of the Starsys
operation, which we
acquired on January 31, 2006. The success of our combined
companies will
happen as we continue to generate revenue and execute profitably
on
existing and new contracts, which we began to do in 2006.
Although we
recorded a net loss for 2006 on a combined basis, it was
substantially less
than pro forma losses in the past two years and illustrates
the turn-around
is well under way, with completion of certain historical
programs that have
hindered Starsys’ past performance. Now, as we move into
2007, we can
focus on profitable program execution and winning new government
and
commercial contracts.”
Cost of sales was approximately $25.7 million, or 79.0%
of net sales, as
compared to approximately $6.9 million, or 76.7% of net
sales, during the
same period in 2005. Cost of sales consists of direct and
allocated costs
associated with individual contracts. The increase in cost
of sales and the
corresponding decrease in margin were due to losses on certain
fixed price
development contracts. Operating expenses increased from
approximately
$1.8 million, or 19.9% of net sales, for the year ended
December 31, 2005
to approximately $7.8 million, or 23.9% of net sales, for
the same twelve
months ended December 31, 2006. The increase was attributed
mainly to the
acquisition of Starsys’ general and administrative costs
and the addition
of key management personnel.
The loss from operations was approximately $953,000 for
the year ended
December 31, 2006, compared to income from operations of
approximately
$312,000 for 2005. Net loss for the year ended December
31, 2006 was
approximately $950,000, or ($0.05) per share, compared to
net income of
approximately $501,000, or $0.01 per share, for the same
period in 2005.
During the year ended December 31, 2006, EBITDA was approximately
$163,000,
or 0.5% of revenue, compared to an EBITDA of approximately
$503,000, or
5.6% of revenue, for 2005. EBITDA is a non-GAAP measure
defined as GAAP
net income before net interest income (expense), taxes,
depreciation and
amortization. Not every company calculates EBITDA in the
same way.
Interest expense, including non-cash interest expense, gain
on the Poway
building sale, and stock option expense under FASB 123 (R)
are not included
in SpaceDev’s calculation of EBITDA. The Company may continue
to incur
charges related to stock and stock-based compensation to
employees and
others, as required under FASB 123(R), or non-cash interest
expense related
to the exercise of warrants under previous debt financings,
and will
continue to amortize the gain on the 2003 Poway building
sale.
The following table reconciles EBITDA to net income (loss)
for the years
ended December 31, 2006 and 2005:
For the twelve months ended December 31, 2006 December 31, 2005
(Audited) (Audited)
----------------- -----------------
Net Income (Loss) $ (952,372) $ 501,264
----------------- -----------------
Interest Income (83,362) (105,840)
Cash Interest Expense 65,713 2,873
Non-Cash Interest Expense 114,600 28,875
Gain on Building Sale (117,274) (117,272)
Stock Option Expense 133,379 0
Provision for Income Taxes 19,290 1,600
Depreciation and Amortization 982,860 191,924
----------------- -----------------
EBITDA * $ 162,834 $ 503,424
================= =================
EBITDA is a non-GAAP financial measure and should not be
considered as an
alternative to net income (as an indicator of operating
performance) or as
an alternative to cash flow (as a measure of liquidity or
ability to
service debt obligations).
Net cash used in operating activities totaled approximately
$2.0 million
for the year ended December 31, 2006, and net cash provided
by operating
activities totaled approximately $397,000 for 2005. The
increase in cash
used for operating activities resulted primarily due to
the need to use
cash resources to pay accounts payable and fund accounts
receivable, which
were assumed upon the acquisition of Starsys.
Year-End Conference Call Details
SpaceDev will host a conference call on April 4, 2007 at
1:00 p.m. EDT to
discuss the year-end results. All those interested in hearing
management’s
discussion are invited to join the call by dialing (866)
558-3008 and
entering the PIN 5410 when prompted. A replay of the conference
call will
be available for thirty (30) days through the Investor Relations
section of
SpaceDev’s web site, www.spacedev.com.
For more information on SpaceDev, please review the Company’s
filings on
the SEC EDGAR system at www.sec.gov
or at www.spacedev.com.
Non-GAAP Financial Measures
This release contains disclosure of EBITDA, which is a non-GAAP
financial
measure within the meaning of Regulation G promulgated by
the Securities
and Exchange Commission. The definition of EBITDA used to
calculate the
EBITDA figures presented above, while generally consistent
with the most
common definition used by investors and financial analysts,
may not be
comparable to similarly titled measures reported by other
companies. The
Company believes that EBITDA provides an important additional
perspective
on its operating results, its ability to service its long-term
obligations,
its ability to fund continuing growth, and its ability to
continue as a
going concern. The Company’s management regularly evaluates
its progress
based on EBITDA. The Company believes that EBITDA, while
providing useful
information, should not be considered in isolation or as
an alternative to
other financial measures determined under GAAP, such as
net income or loss
(as an indicator of operating performance) or cash flow
(as measure of
liquidity).
About SpaceDev
SpaceDev, Inc. is a space technology/aerospace company that
creates and
sells affordable and innovative space products and mission
solutions. For
more information, visit www.spacedev.com
and www.starsys.com.
Except for factual statements made herein, this news release
consists of
forward-looking statements that involve risks, uncertainties
and
assumptions that are difficult to predict. Words such as
“believe,”
“intends,” “expects,” “plans,” “anticipates” and variations
thereof,
identify forward-looking statements, although their absence
does not mean
that a statement is not forward looking. Forward-looking
statements are
based on the Company’s current expectations, and are not
guarantees of
performance. The Company’s actual results could differ materially
from its
current expectations. Factors that could contribute to such
differences
include risks and uncertainties associated with: the Company’s
ability to
effectively integrate acquisitions; rescheduling or cancellation
of
customer orders; uncertainties in the government budgeting
process; ability
to control costs and expenses; and the possible need for
additional
financing. Reference is also made to other factors described
in the
Company’s periodic reports filed with the SEC, including
the Company’s most
current Annual Report on Form 10-KSB. These forward-looking
statements
speak only as of the date of this release. SpaceDev does
not intend to
update these forward-looking statements.
SpaceDev, Inc.
and Subsidiaries
Consolidated Balance Sheets
December 31, 2006 2005
------------ ------------
Assets
Current Assets
Cash and cash equivalents $ 1,438,146 $ 5,750,038
Accounts receivable 7,289,720 1,279,027
Inventory 309,205 21,340
Other current assets 599,565 -
Note receivable - 1,353,440
------------ ------------
Total Current Assets 9,636,636 8,403,845
Assets - Net 3,793,365 1,073,773
Intangible Assets 841,133 -
Goodwill 11,233,665 -
Other Assets 626,086 1,531,031
------------ ------------
------------ ------------
Total Assets $ 26,130,885 $ 11,008,649
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 1,755,985 $ 1,237,099
Current portion of notes payable - 9,457
Current portion of capitalized lease
obligations 35,441 1,469
Accrued payroll, vacation and related taxes 1,184,457 290,914
Billings in excess of costs and deferred
revenue 2,816,072 153,440
Revolving line of credit 805,172 -
Other accrued liabilities 1,602,561 516,380
------------ ------------
Total Current Liabilities 8,199,688 2,208,759
Notes Payable, Less Current Maturities 50,193 -
Capitalized Lease Obligations, Less Current
Maturities 136,709 -
Deferred Gain - Assets held for sale 713,405 830,677
Other Long Term Liabilities 15,266 -
------------ ------------
Total Liabilities 9,115,261 3,039,436
Commitments and Contingencies
Stockholders’ Equity
Convertible preferred stock, $.001 par
value, 10,000,000 shares authorized, and
252,963 and 248,460 shares issued and
outstanding, respectively
Series C Convertible Preferred Stock 248 248
Series D-1 Convertible Preferred Stock 5 -
Common stock, $.0001 par value;
100,000,000 shares authorized, and
29,550,342 and 24,606,275 shares issued
and outstanding, respectively 2,953 2,460
Additional paid-in capital 33,150,566 22,541,994
Accumulated deficit (16,138,148) (14,575,489)
------------ ------------
Total Stockholders’ Equity 17,015,624 7,969,213
------------ ------------
Total Liabilities and Stockholders' Equity $ 26,130,885 $ 11,008,649
============ ============
Please reference the Company's Form 10-KSB to access the notes which are an
integral part of the consolidated financial statements.
SpaceDev, Inc.
and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31, 2006 % 2005 %
------------ ----- ------------ -----
Net Sales $ 32,555,570 100.0% $ 9,005,011 100.0%
------------ ----- ------------ -----
Cost of Sales* 25,720,581 79.0% 6,905,902 76.7%
------------ ----- ------------ -----
Gross Margin 6,834,989 21.0% 2,099,109 23.3%
Operating Expenses
Marketing and sales 2,196,838 6.7% 673,636 7.5%
Research and development 284,346 0.9% 31,940 0.4%
General and administrative 5,307,210 16.3% 1,082,033 12.0%
------------ ----- ------------ -----
Total Operating Expenses* 7,788,394 23.9% 1,787,609 19.9%
------------ ----- ------------ -----
Income/(Loss) from Operations (953,405) -2.9% 311,500 3.5%
------------ ----- ------------ -----
Non-Operating Income/(Expense)
Interest and other income 83,362 0.3% 105,840 1.2%
Interest expense (65,713) -0.2% (2,873) 0.0%
Gain on building sale 117,274 0.4% 117,272 1.3%
Non-Cash loan fee (114,600) -0.4% (28,875) -0.3%
------------ ----- ------------ -----
Total Non-Operating
Income/(Expense) 20,323 0.1% 191,364 2.1%
------------ ----- ------------ -----
Income (Loss) Before Income
Taxes (933,082) -2.9% 502,864 5.6%
Income tax provision 19,290 0.1% 1,600 0.0%
------------ ----- ------------ -----
Net Income/(Loss) $ (952,372) -2.9% $ 501,264 5.6%
============ ===== ============ =====
Net Income/(Loss) (952,372) 501,264
Less: Preferred Dividend
Payments (610,287) (170,956)
Adjusted Net Income (Loss)
for EPS Calculation (1,562,659) 330,308
Net Income/(Loss) Per Share: $ (0.05) $ 0.01
------------ ----- ------------ -----
Weighted-Average Shares Used in
Calculation 28,666,059 22,270,997
Fully Diluted Net Income/(Loss)
Per Share: $ (0.05) $ 0.01
------------ ----- ------------ -----
Weighted-Average Shares Used in
Calculation 28,666,059 24,606,882
* The following table shows how the Company's stock option expense would
be allocated to all expenses.
Cost of sales $ 24,339 $ -
Marketing and sales 4,840 -
Research and development - -
General and administrative 104,200 -
------------ ----- ------------ -----
$ 133,379 $ -
============ ===== ============ =====
Please reference the Company's Form 10-KSB to access the notes which are an
integral part of the consolidated financial statements.
