SPACEHAB, Incorporated, a leading provider of commercial space services, today
announced financial results for the Company’s fourth quarter and the 2003
fiscal year ended June 30, 2003.
Fourth Quarter Results
Revenues for the fourth fiscal quarter of 2003 declined to $13.7 million
from $28.0 million for fourth quarter of 2002. The Company reported a net
loss of $20.1 million, or ($1.63) per basic and diluted share, compared to a
net loss of $0.2 million, or ($0.02) per basic and diluted share for the same
period a year ago. Excluding a non-cash charge of $16.1 million to write-down
certain assets under development that are no longer being funded due to
uncertainties in human space flight programs, SPACEHAB’s adjusted net loss was
$4.0 million. Fourth quarter results were impacted by a shift in the business
mix including lower value of missions under contract, reduced operations
associated with NASA’s grounding of the Space Shuttle, and the previously
announced completion of a SPACEHAB Government Services support contract at the
Johnson Space Center. These declines were partially offset by higher revenue
within the Company’s Astrotech Space Operations business unit.
SPACEHAB reported a fourth quarter loss from operations of $18.6 million
compared to $0.1 million income from operations in the same period last fiscal
year. Excluding the previously mentioned asset write-down, the Company’s
adjusted loss from operations was $2.5 million. As a result of management’s
continuing cost reduction efforts and elimination of non-core operating
expenses, fourth quarter selling, general, and administrative and research and
development expenses declined $0.1 million to $3.9 million. Fourth quarter
fiscal year 2003 EBITDA (earnings before interest, taxes, depreciation,
amortization, and other non-cash charges) was ($0.9) million compared to $3.9
million last year.
Year End Results
Fiscal year revenues decreased to $95.0 million for the year ended June
30, 2003, compared to $102.8 million for the year ended June 30, 2002. The
Company reported a net loss for the year of $81.8 million, or ($6.66) per
basic and diluted share, compared to a net loss of $2.4 million, or ($0.20)
per basic and diluted share, for the prior fiscal year. Excluding non-cash
charges totaling $78.3 million, the Company’s adjusted net loss was $3.4
million.
Selling, general, and administrative and research and development expenses
for the year ended June 30, 2003 declined $5.9 million to $13.2 million,
compared to $19.1 million for the year ended June 30, 2002. Previous fiscal
year operating expenses included $2.7 million in non-core operating expenses
and $3.2 million of operating expenses eliminated in fiscal year 2003. Non-
core operating expenses eliminated in fiscal 2003 include bid and proposal
costs incurred in connection with a NASA procurement at the Marshall Space
Flight Center and further reductions in Space Media, Inc.’s operations.
EBITDA for the year ended June 30, 2003 was $11.9 million, compared to $14.6
million for the year ended June 30, 2002.
Fiscal 2003 results were impacted by the aforementioned Space Shuttle
mission delays and the completion of a contract. SPACEHAB previously
announced the loss of its Research Double Module (RDM) on the STS-107 Space
Shuttle mission and recorded a one-time charge of $50.3 million during the
third quarter. Additionally, the Company previously reported an impairment of
$11.9 million of its goodwill associated with its Johnson Engineering business
unit, now known as SPACEHAB Government Services. In the fourth quarter, the
Company recorded a write-down of $16.1 million for certain assets under
development that are no longer being funded due to uncertainties in human
space flight programs. These non-cash charges recorded in the third and
fourth quarters of the fiscal year totaled $78.3 million.
SPACEHAB reported a loss from operations of $75.4 million for the year
ended June 30, 2003. Excluding these charges referred to above, SPACEHAB’s
adjusted income from operations was $3.0 million for the year.
Liquidity
The combined cash, cash equivalents, and short-term investments at June
30, 2003 were $15.3 million. As previously disclosed, the Company received
$17.7 million from the proceeds of its commercial insurance policy following
the loss of the RDM in the third quarter. During the fourth quarter, SPACEHAB
repaid $0.5 million of debt obligations and repaid $6.3 million of debt for
the fiscal year.
“We have sufficient cash to fund our ongoing operations and support new
business initiatives for at least the next fiscal year,” said Julia A.
Pulzone, SPACEHAB Chief Financial Officer. “We expect to utilize existing
cash and any potential payment from NASA to support strategies to improve
profitability, support new business initiatives, and reduce debt.”
In July 2003 the Company submitted a detailed claim in draft to NASA for
recovery of its RDM investment in the amount of $87.0 million. The claim is
anticipated to be revised in the first quarter of fiscal year 2004 to
incorporate the findings of the Columbia Accident Investigation Board, and
upon revision will be re-filed with NASA. The Company believes it has a basis
for recovery of the loss from NASA but there can be no assurances as to the
timing or the amount, if any, to be received from the claim. Upon resolution
of the claim, any proceeds from NASA would be recorded in the period in which
the claim is resolved.
Update of Ongoing Operations
“Fiscal 2003 was a year of challenges and I am pleased with how we have
responded,” stated Michael E. Kearney, President and Chief Executive Officer.
“During the fiscal year we maintained a strong, although lower, annual revenue
base despite delays in the Space Shuttle mission schedule. Until such time as
NASA resumes regular Space Shuttle flights, which is currently reported to be
no earlier than March 2004, we remain focused on supporting three upcoming
Space Station missions and leveraging our leadership role in space services to
pursue new business opportunities. We are committed to reducing costs and
growing our business base.”
The SPACEHAB Flight Services (SFS) business unit is continuing operations,
supporting three of the next five planned Space Shuttle missions. SPACEHAB is
in negotiations with NASA and Boeing on the value of equitable adjustments for
delays in these missions that will provide additional revenue for contracted
preparation activities during the period prior to NASA’s return to flight.
During the fourth quarter, SFS personnel completed all STS-107 accident
investigation support activities with NASA.
SPACEHAB Government Services (SGS) continues to provide critical services
to NASA including support of stowage integration and configuration management
for the International Space Station (ISS). The Company is pursuing additional
ISS-related opportunities through the submission of proposals for three new
five-year contracts. Subsequent to year end, NASA notified the Company that
it made the competitive range as a finalist on all three of these
procurements. Contract awards are anticipated in October 2003 with a contract
start date in January 2004. In addition, SGS and an international team of
technical experts submitted a proposal to Lockheed Martin for design and
development of multiple cryogenically cooled freezer units to be used onboard
the Shuttle, the SPACEHAB module, and the ISS. SPACEHAB recently received
notification that this proposal was also deemed to be within the competitive
range.
SPACEHAB subsidiary, Astrotech Space Operations, was recently awarded a
new contract by NASA to provide payload processing services in support of the
AURA mission at Vandenberg Air Force Base, California. In the fourth quarter,
Astrotech received two other NASA missions, MESSENGER and Deep Impact. These
three contracts further solidify the Company’s growing business base in the
government sector. With the successful April 2003 launch of the Boeing-built
Asiasat-4 spacecraft, the May 2003 liftoff of HellasSat, the June 2003 launch
of the Thuraya D-2 spacecraft by Sea Launch, and the July 2003 launch of the
Rainbow 1 Direct Broadcast Satellite, this business unit remains the leading
supplier of payload processing services to the commercial business sector.
Non-GAAP Financial Measures
This announcement includes financial measures computed in accordance with
Generally Accepted Accounting Principles in the United States (GAAP), as well
as certain non-GAAP or “adjusted” results, which exclude certain charges
recorded in the third and fourth quarters of fiscal year 2003. Management
believes the adjusted results are more indicative of the underlying trend in
operations of the Company and will continue to provide adjusted results in
addition to reporting earnings in accordance with GAAP.
EBITDA is also included as an additional measure of Company performance.
EBITDA includes components that are significant in understanding and assessing
our results of operations and cash flows. EBITDA should not be construed as a
substitute for net income, determined in accordance with GAAP, as an indicator
of operating performance, nor does EDITDA represent cash flow from operating
activities. Management believes that EBITDA is relevant and useful
information and is disclosing this information to permit a more comprehensive
analysis of our operating performance, as an additional meaningful measure of
performance and liquidity, and to provide additional information with respect
to our ability to meet future debt service, capital expenditure and working
capital requirements. The accompanying table presents the reconciliation from
GAAP to the adjusted results and calculation of EBITDA.
Conference Call
SPACEHAB will host a conference call on August 28, 2003 at 10:00 a.m.
Eastern time to discuss the fourth quarter earnings release. To participate
on the call, please register with Haris Tajyar at 818-981-5300. To
participate via the Internet, visit the Investor Relations section of the
SPACEHAB website at www.spacehab.com. A taped replay will be available
immediately following the conference call and accessible via access code
18722179 until 11:59 p.m. Eastern time on August 29, 2003 at 800-252-6030
(domestic calls) or 402-220-2491 (international calls). An audio archived
webcast of the conference call will be available on the Company website for 90
days.
About SPACEHAB, Inc.
With approximately $100 million in annual revenue, SPACEHAB, Incorporated
(www.spacehab.com) is a leading provider of commercial space services. The
Company develops, owns, and operates habitat and laboratory modules and cargo
carriers aboard NASA’s Space Shuttles for space station resupply and research
purposes. Its Government Services business unit provides Space Station and
Space Shuttle support services including orbiter crew compartment integration,
stowage, and configuration management to NASA’s Johnson Space Center in
Houston. SPACEHAB’s Astrotech subsidiary provides commercial satellite
processing services at facilities in California and Florida. Additionally,
through The Space Store, Space Media provides space merchandise to the public
and space enthusiasts worldwide (www.thespacestore.com).
This release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected in such statements. Such risks and
uncertainties include, but are not limited to, whether the Company will fully
realize the economic benefits under its NASA and other customer contracts, the
timing and mix of Space Shuttle missions, the impact of the recent Columbia
tragedy on the Company’s existing and future business operations, the amount
of any indemnification payments the Company may receive for its RDM which was
lost as part of the Columbia tragedy, the successful development and
commercialization of new space assets, technological difficulties, product
demand, timing of new contracts, launches and business, market acceptance
risks, the effect of economic conditions, uncertainty in government funding,
the impact of competition, and other risks detailed in the Company’s
Securities and Exchange Commission filings. The Company assumes no obligation
to update these forward-looking statements.
For more information, contact:
Haris Tajyar Julia A. Pulzone
Managing Partner Chief Financial Officer
Investor Relations International SPACEHAB, Inc. -- Washington Office
Phone 818-981-5300 Phone 202-488-3500
Fax 818-981-5303 Toll free 888-647-9543
htajyar@irintl.com pulzone@hqspacehab.com
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in thousands,
except share data) Three Months Year
Ended June 30, Ended June 30,
2003 2002 2003 2002
Revenue $13,688 $ 28,043 $94,963 $102,773
Costs of revenue 12,275 23,164 78,791 81,767
Gross profit 1,413 4,879 16,172 21,006
Operating expenses
Selling, general and
administrative 3,869 3,913 13,098 18,737
Research and
development 13 92 118 383
Nonrecurring charge - - 50,268 -
Asset impairment 16,143 - 16,143 -
Goodwill impairment - - 11,925 -
Loss on subleases - 770 - 770
Total operating
expenses 20,025 4,775 91,552 19,890
Income (loss) from
operations (18,612) 104 (75,380) 1,116
Interest expense, net
of capitalized
amounts (1,702) (2,502) (7,243) (6,683)
Interest and other
income, net 47 24 (9) 1,150
Loss before income
taxes (20,267) (2,374) (82,632) (4,417)
Income tax benefit 130 2,133 857 2,050
Net loss $(20,137) $(241) $(81,775) $(2,367)
Basic and diluted net
loss per share:
Net loss per share --
basic and diluted $(1.63) $(0.02) $(6.66) $(0.20)
Shares used in
computing net loss
per share -- basic
and diluted 12,353,587 12,087,269 12,285,467 11,884,309
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(in thousands) Three Months Year
Ended June 30, Ended June 30,
2003 2002 2003 2002
GAAP Net loss $(20,137) $(241) $(81,775) $(2,367)
Nonrecurring charge - - 50,268 -
Asset impairment 16,143 - 16,143 -
Goodwill impairment - - 11,925 -
Loss on subleases - 770 - 770
Adjusted net income
(loss) $(3,994) $529 $(3,439) $(1,597)
Three Months Year
Ended June 30, Ended June 30,
2003 2002 2003 2002
GAAP Income (loss)
from operations $(18,612) $104 $(75,380) $1,116
Nonrecurring charge - - 50,268 -
Asset impairment 16,143 - 16,143 -
Goodwill impairment - - 11,925 -
Loss on subleases - 770 - 770
Adjusted income (loss)
from operations $(2,469) $874 $2,956 $1,886
Three Months Year
Ended June 30, Ended June 30,
2003 2002 2003 2002
GAAP Income (loss)
from operations $(18,612) $104 $(75,380) $1,116
Depreciation and
amortization 1,542 3,021 8,924 12,684
Nonrecurring charge - - 50,268 -
Asset impairment 16,143 - 16,143 -
Goodwill impairment - - 11,925 -
Loss on subleases - 770 - 770
EBITDA $(927) $3,895 $11,880 $14,570
Selected Financial Data by Segment (Unaudited)
(In thousands) Year
Ended June 30,
2003 2002
Revenue
SPACEHAB Flight Services $46,757 $51,374
SPACEHAB Government Services 34,742 40,785
Astrotech Space Operations 12,410 9,936
Space Media, Inc. 1,054 678
All Other - -
Total Revenue $94,963 $102,773
Income (loss) before income taxes
SPACEHAB Flight Services $(75,005) $(3,916)
SPACEHAB Government Services (9,879) 183
Astrotech Space Operations 2,406 2,842
Space Media, Inc. (154) (1,591)
All Other - (1,935)
Income (loss) before income taxes $(82,632) $(4,417)
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands) June 30, June 30,
ASSETS 2003 2002
Cash, restricted cash and investments $15,348 $2,694
Accounts receivable, net 6,780 13,802
Property, plant and equipment, net 83,689 175,851
Goodwill, net 8,274 20,294
Other assets, net 7,265 8,185
Total assets $121,356 $220,826
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses 15,629 17,392
Notes payable, current 4,222 6,185
Deferred revenue 7,370 15,405
Convertible notes payable 63,250 63,250
Other long term debt 16,806 20,176
Other long term liabilities and deferred revenue 8,989 9,998
Minority interest - 750
Stockholders' equity 5,090 87,670
Total liabilities and stockholders' equity $ 121,356 $220,826
