Successful Execution on Current Contracts Leads to Eleventh Consecutive Quarter of Revenue Growth
POWAY, Calif. SpaceDev, Inc. reported its financial results for the third quarter ended September 30, 2005. After eleven successive quarters of increasing net sales and eight quarters of increasing EBITDA*, SpaceDev achieved its third consecutive quarter of net income and maintained a positive cash flow from operations.
Net sales increased approximately 82%, to $2,234,000, for the three-months ended September 30, 2005 compared to $1,230,000 for the same three months in 2004. This increase was primarily due to execution on current contracts, including a second task order with the Missile Defense Agency valued at approximately $8.3 million. This current task order commenced October 2004 and is part of a larger contract with the Missile Defense Agency.
“SpaceDev moved forward some important strategic developments this quarter and continued its efforts to expand significantly our private sector space program,” commented Jim Benson, SpaceDev’s Founding Chairman and Chief Executive Officer. “Our recent merger agreement with Starsys, along with our continued expectation of our business plan, are important steps toward our goal of being a leader in the industry, by providing unique and cost-effective space solutions.”
SpaceDev continued to achieve income from operations for the seventh consecutive quarter. Income from operations was $83,000 for the three months ended September 30, 2005, compared to $49,000 for the same three months in 2004. Also, during the third quarter of 2005, EBITDA increased to $127,000, or 5.7% of net sales, compared to EBITDA of $72,000, or 5.9% of net sales, for the same three-month period in 2004. EBITDA is a non-GAAP financial measure defined as earnings before net interest income (expense), taxes, depreciation and amortization.*
Net income for the three and nine months ending September 30, 2005 was $136,000 and $348,000, or $0.01 and $0.02 per share, respectively, compared to a net loss of $603,000 and $2,332,000, or ($0.03) and ($0.13) per share, for the comparable periods in 2004. The increase in net income was mainly due to our reduction of non-cash loan fees that we incurred in 2004 of over $2.0 million for the nine months ended September 30, 2004. SpaceDev has had no non-cash loan fees attributed to borrowing under the current revolving credit facility in 2005; however, a small non-cash loan fee was expensed when warrants were exercised in the second quarter of 2005 that were originally associated with the establishment of the revolving credit facility.
“SpaceDev is committed to build its business profitably on the growth of the private space industry both through our existing business and acquisitions. Both components of our strategy have taken big steps forward. Our ongoing business profitably executed on large existing contracts for high performance, low cost satellite, spacecraft and propulsion systems. On the acquisition side, we recently entered into a merger agreement with Starsys that we believe will empower us to win larger and more diverse contracts in the future,” commented Richard Slansky, President and Chief Financial Officer of SpaceDev.
Net cash provided by operating activities totaled $313,000 for the nine months ended September 30, 2005, an improvement of $247,000 as compared to $66,000 used in operating activities during the same nine-month period in 2004. The positive trend in our current cash position was mainly due to our ability to generate net income of $136,000 and $348,000 for the three- and nine-month periods ended September 30, 2005, respectively, versus net losses of $603,000 and $2,332,000 for the same three- and nine-month periods in 2004.
Net cash decreased to $4,022,000 at September 30, 2005, a decrease of $57,000 from $4,079,000 at September 30, 2004. The decrease in net cash was due to uses of cash, such as the Starsys bridge loan on September 8, 2005 offset by the issuance of our Series C Preferred Stock in 2004, the exercise of stock options and warrants from October 1, 2004 through September 30, 2005 and advances/conversions under our revolving credit facility in late 2004. The financing, combined with the conversions and exercises, has resulted in a positive stockholders’ equity of $5,408,000 at September 30, 2005 from $3,076,000 at September 30, 2004. This is an improvement in stockholders equity of over $2.3 million.
Mr. Benson concluded, “This quarter reflects our ongoing concerted corporate initiative to continue improving our balance sheet and growing this business profitably. We believe our merger with Starsys will substantially increase our technical capabilities and our revenue run rate post-merger and should provide many benefits to drive growth and create sustainable long term earnings growth for our investors.”
Third Quarter Conference Call Details
SpaceDev will host a conference call later today at 12:00 p.m. EST to discuss the third quarter results. All those interested in hearing management’s discussion may join the call by dialing 877-407-9205. International participants may access the call by dialing 201-689-8054. A replay will be available for one week following the call by dialing 877-660-6853 for domestic participants and 201-612-7415 for international participants and entering passcode 286 and conference ID number 176748 when prompted. Participants may also access a live webcast of the conference call through the investor relations section of SpaceDev’s web site, www.spacedev.com. The replay will be available for 90 days.
For more information regarding the Company, 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 EBITDA presented above, while considered 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, 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).
The following tables reconciles Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) to net income (loss) for the three and nine months ended September 30, 2005 and 2004, respectively:
For the three months ended September September
30, 2005 30, 2004
(Unaudited) (Unaudited)
----------------------------------------------------------------------
Net Income (Loss) $136,251 $(602,888)
----------------------------------------------------------------------
Interest Income (24,848) (5,619)
Interest Expense 452 23,110
Non-Cash Interest exp. (Debt Discount) - -
Gain on Building Sale (29,318) (29,318)
Loan Fee - Equity Conversion - 663,481
Provision for income taxes 400 -
Depreciation and Amortization 44,128 22,749
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EBITDA $127,065 $ 71,515
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For the nine-months ending September September
30, 2005 30, 2004
(Unaudited)(Unaudited)
----------------------------------------------------------------------
Net Income (Loss) $348,412 $(2,332,304)
----------------------------------------------------------------------
Interest Income (69,632) (5,619)
Interest Expense 2,283 62,634
Gain on Building Sale (87,953) (87,954)
Loan Fee - Equity Conversion 28,875 2,456,794
Provision for income taxes 1,200 -
Depreciation and Amortization 108,265 55,236
----------------------------------------------------------------------
EBITDA $331,450 $ 148,787
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About SpaceDev
SpaceDev is a high tech space development company that creates and sells affordable and innovative space products and solutions to government and commercial enterprises. SpaceDev’s innovations include the design, manufacture, marketing and operation of sophisticated micro- and nano- satellites. SpaceDev designs and builds safe hybrid rocket motor propulsion systems for sub-orbital and orbital transportation systems, potentially for cargo and human space flight. Upon founding SpaceDev in 1997, Jim Benson started the trend of successful computer entrepreneurs moving into the space development arena. For more information, visit www.spacedev.com.
This news release may contain forward-looking statements concerning the Company’s business and future prospects and other similar statements that do not concern matters of historical fact. Words and expressions such as “believe,” “expect,” “intend,” “plan,” “will,” “anticipate,” and variations thereof, identify forward-looking statements, but their absence does not mean that a statement is not forward looking. Forward-looking statements are based on the Company’s current expectations, which are subject to all of the risks and uncertainties customarily associated with developing business ventures and include, but are not limited to, the following risks and uncertainties: U.S. government budget cuts or policy changes may result in the cancellation of future phases of existing contracts or the failure to award new contracts; many of our contracts may be terminated by the customer; the demand for our technology and products is uncertain; we have limited operating history and lack of experience in new lines of business; we may face shortages of components, raw materials and suppliers; we may experience problems and costs associated with our proposed merger and integration with Starsys; assuming a successful closing of the merger, we may not experience the anticipated benefits of the merger; we will need additional capital to meet our obligations under the Starsys merger agreement; completion of the merger with Starsys may decrease of our future operating results; many of our competitors have greater resources than we do; and expansion into new lines of business or new product development may divert management’s attention and expose the Company to unbudgeted costs, as well as risks discussed in the Company’s periodic reports filed with the U.S. Securities and Exchange Commission. The Company’s actual results may differ materially from current expectations and forward-looking statements are not guarantees of performance. Readers are cautioned not to put undue reliance on forward-looking statements contained in this release and to read it in conjunction with the Company’s quarterly report on Form 10-QSB for the period ended September 30, 2005, including the section entitled “Business Risks.” The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or for any other reason.
Copyright © 2005 SpaceDev, Inc. All rights reserved.
SpaceDev, Inc. and Subsidiary
Consolidated Balance Sheets
(Unaudited)
At September 30, 2005 2004
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Assets
Current Assets
Cash and cash equivalents $4,022,243 $4,078,593
Accounts receivable 1,096,645 427,358
Work in progress 10,412 5,754
Note reveivable (Note 5) 1,326,453 -
----------------------------------------------------------------------
Total current assets 6,455,753 4,511,705
Fixed Assets - Net 822,980 248,066
Other Assets 64,469 43,042
----------------------------------------------------------------------
$7,343,202 $4,802,813
See Form 10-QSB for selected footnotes and disclosures.
SpaceDev, Inc. and Subsidiary
Consolidated Balance Sheets
(Unaudited)
At September 30, 2005 2004
---------------------------------------------------------
Liabilities and
Stockholders' Equity
Current Liabilities
Current portion of
notes payable (Note 3(a)) $18,797 $36,239
Current portion of
capitalized lease
obligations 2,479 3,943
Accounts payable
and accrued expenses 398,443 161,980
Accrued payroll,
vacation and
related taxes 350,145 207,028
Deferred revenue 126,453 49,779
Employee stock
purchase plan 9,974 3,406
Other accrued
liabilities 168,470 265,547
---------------------------------------------------------
Total Current Liabilities $1,074,761 727,922
Notes Payable, Less Current
Maturities (Note 3(a)) - 18,797
Capitalized Lease Obligations,
Less Current Maturities - 2,479
Deferred Gain - Assets
Held For Sale (Note 3(a)) 859,996 977,267
---------------------------------------------------------
Total Liabilities 1,934,757 1,726,465
Commitments and Contingencies
Stockholders' Equity
Convertible preferred stock,
$.001 par value, 10,000,000
shares authorized, 248,460
and 250,000 shares issued
and outstanding,
respectively (Note 4) 248 250
Common stock, $.0001 par
value; 50,000,000 shares
authorized, and 22,319,156
and 20,026,263 shares
issued and outstanding,
respectively (Note 4) 2,231 2,002
Additional paid-in capital
(Note 4) 20,091,408 16,724,176
Additional paid-in capital
- stock options - 750,000
Deferred compensation - (250,000)
Accumulated deficit (14,685,442)(14,150,080)
---------------------------------------------------------
Total Stockholders' Equity 5,408,445 3,076,348
---------------------------------------------------------
Total Liabilities and
Stockholders' Equity $7,343,202 $4,802,813
See Form 10-QSB for selected footnotes and disclosures.
SpaceDev, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
Three and Nine Months Ended June 30, Three Months Ended
2005 % 2004 %
----------------------------------------------------------------------
Net Sales $2,234,010 100.0% $1,230,126 100.0%
Total Cost of Sales 1,709,077 76.5% 952,944 77.5%
Gross Margin 524,933 23.5% 277,182 22.5%
----------------------------------------------------------------------
Operating Expenses
Marketing and sales expense 188,655 8.4% 120,367 9.8%
General and administrative 253,341 11.3% 108,049 8.8%
----------------------------------------------------------------------
Total Operating Expenses 441,996 19.8% 228,416 18.6%
----------------------------------------------------------------------
Income from Operations 82,937 3.7% 48,766 4.0%
----------------------------------------------------------------------
Non-Operating (Income) Expense
Interest income (24,848) -1.1% (5,619) -0.5%
Interest expense 452 0.0% 23,110 1.9%
Gain on building sale (Note
3(a)) (29,318) -1.3% (29,318) -2.4%
Non-Cash loan fee - equity
conversions (Note 3(c)) - 0.0% 663,481 53.9%
----------------------------------------------------------------------
Total Non-Operating (Income)
Expense (53,714) -2.4% 651,654 53.0%
----------------------------------------------------------------------
Income (Loss) Before Taxes 136,651 6.1% (602,888) -49.0%
Income tax provision 400 0.0% - 0.0%
Net Income (Loss) $ 136,251 6.1% $ (602,888) -49.0%
----------------------------------------------------------------------
Net Income (Loss) Per Share:
Net income (loss) $ 0.01 ($0.03)
----------------------------------------------------------------------
Weighted-Average Shares
Outstanding 22,241,448 19,228,019
Fully Diluted Net Income (Loss)
Per Share:
Net income (loss) $ 0.00 ($0.03)
----------------------------------------------------------------------
Fully Diluted Weighted-Average
Shares Outstanding 29,362,131 19,228,019
Three and Nine Months Ended June 30, Nine Months Ended
2005 % 2004 %
----------------------------------------------------------------------
Net Sales $5,942,558 100.0% $3,445,569 100.0%
Total Cost of Sales 4,571,505 76.9% 2,702,583 78.4%
Gross Margin 1,371,053 23.1% 742,986 21.6%
----------------------------------------------------------------------
Operating Expenses
Marketing and sales expense 493,344 8.3% 335,652 9.7%
General and administrative 654,524 11.0% 313,784 9.1%
----------------------------------------------------------------------
Total Operating Expenses 1,147,868 19.3% 649,436 18.8%
----------------------------------------------------------------------
Income from Operations 223,185 3.8% 93,550 2.7%
----------------------------------------------------------------------
Non-Operating (Income) Expense
Interest income (69,632) -1.2% (5,619) -0.2%
Interest expense 2,283 0.0% 62,633 1.8%
Gain on building
sale (Note 3(a)) (87,953) -1.5% (87,954) -2.6%
Non-Cash loan fee - equity
conversions (Note 3(c)) 28,875 0.5% 2,456,794 71.3%
----------------------------------------------------------------------
Total Non-Operating (Income)
Expense (126,427) -2.1% 2,425,854 70.4%
----------------------------------------------------------------------
Income (Loss) Before Taxes 349,612 5.9% (2,332,304) -67.7%
Income tax provision 1,200 0.0% - 0.0%
Net Income (Loss) $ 348,412 5.9%$(2,332,304) -67.7%
----------------------------------------------------------------------
Net Income (Loss) Per Share:
Net income (loss) $ 0.02 ($0.13)
----------------------------------------------------------------------
Weighted-Average Shares
Outstanding 21,777,211 18,019,886
Fully Diluted Net Income (Loss)
Per Share:
Net income (loss) $ 0.01 ($0.13)
----------------------------------------------------------------------
Fully Diluted Weighted-Average
Shares Outstanding 29,719,369 18,019,886
See Form 10-QSB for selected footnotes and disclosures.
Contact:
SpaceDev, Inc.
Richard B. Slansky, 858-375-2030
richard.slansky@spacedev.com
or
The Investor Relations Group
Investor:
John Nesbett/Dian Griesel
Media:
Michael Graff
212-825-3210
