Though the space shuttle’s return to flight helped boost Spacehab’s revenues for the year ending June 30 , the subsequent grounding of the orbiter fleet due to lingering safety concerns could have a negative financial impact in the future, company officials said.
Spacehab’s Integrated Cargo Carrier was aboard Space Shuttle Discovery during its July 26-Aug. 9 mission, the first shuttle flight since the February 2003 Columbia disaster. Spacehab is providing equipment for three upcoming shuttle missions, but the timetable for those flights is uncertain because the fleet is grounded again at least until March 2006 due to external tank foam-shedding problems experienced during Discovery’s liftoff.
“The overall margins on these three flights will be slightly reduced due to these delays,” Spacehab Chief Financial Officer Brian Harrington said during a Sept. 6 conference call to discuss the company’s fourth-quarter financial results. Houston-based Spacehab’s primary business is providing equipment and support for shuttle missions.
Spacehab has approximately 3.5 years remaining on its five-year contract with NASA , said Michael Kearney, the company’s chief executive officer . NASA has an option to extend that contact , he noted .
Spacehab posted net income of $100,000 for the fourth quarter of 2005 after losing $2.3 million in the same period last year . The company pulled in $19 million in revenue for the quarter , compared to $11.1 million a year earlier .
Spacehab allocated $500,000 during the quarter to settle litigation with Lloyd’s of London, which insured Spacehab’s Research Double Module that was lost in the Columbia disaster , Harrington said. Spacehab announced June 2 that Lloyd’s agreed to drop its suit against the company to reclaim the $17.7 million it paid out in insurance proceedings, and instead join Spacehab in its separate claim against NASA. Lloyds receives $500,000 from Spacehab under that agreement.
Spacehab still is pursuing its claim against NASA for what it says was negligence on NASA’s part in the accident . NASA paid the company $8 million, but Spacehab has appealed the decision, and is seeking an additional $79.7 million to cover the loss of the company’s hardware.
Overall, Kearney said Spacehab was pleased with its 2005 results. The company posted net income of $5.2 million for the year, compared to $2.1 million in 2004.
“In the midst of great change within the global space services industries, this was a very good, if not a pivotal year, for Spacehab,” Kearney said.
