SPACEHAB REPORTS FINANCIAL RESULTS FOR THIRD QUARTER FISCAL YEAR 2008
Houston, TX (May 7, 2008) -
SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced financial results for the third quarter ended March 31, 2008 of its fiscal year 2008.
Third Quarter Results
SPACEHAB posted a third quarter fiscal 2008 net loss of $834,000 or $0.06 per share, on revenue of $6.6 million compared with a third quarter fiscal 2007 net loss of $1.2 million, or $0.92 per share, on revenue of $12.2 million.
During the quarter, the Company's Astrotech Space Operations subsidiary won three fully funded task orders under the NASA Vandenberg Air Force Base (VAFB) indefinite delivery, indefinite quantity contract, awarded in June 2007. The Company is providing facilities and payload processing services, from its VAFB location, in support of NASA's Ocean Surface Topography Mission/Jason-2, Interstellar Boundary Explorer (IBEX) spacecraft, and the Orbiting Carbon Observatory mission, all scheduled for launch in 2008.
Nine Months Results
SPACEHAB's net loss for the nine months ended March 31, 2007 was $34.5 million, or $4.92 per share, on revenue of $19.5 million, which included $30.2 million of non-cash debt conversion expense upon consummation of the exchange of its Convertible Subordinated Notes, Senior Convertible Notes, and Series B convertible preferred stock into shares of common and preferred stock, compared to a net loss of $3.1 million, or $2.37 per share, on revenue of $39.9 million for first nine months of the prior fiscal year.
In October 2007, SPACEHAB successfully exchanged $7.4 million of its 8.0% convertible notes due October 2007, $46.1 million of its 5.5% convertible notes due October 2010 and its 1.3 million shares of Series B convertible preferred stock for 32.6 million shares of common stock and 61,550 shares of new Series C convertible preferred stock. In November 2007, the Company converted the Series C convertible preferred stock into 89.9 million shares of common stock and affected a 1 for 10 reverse split. On October 15, 2007, SPACEHAB redeemed the outstanding $2.9 million of its 8.0% convertible notes for cash at par.
SPACEHAB also recognized $350,000 of alternative minimum tax expense for the three months and nine months ended March 31, 2008. Under U.S. tax rules, the bond exchange transaction completed in November 2007 resulted in taxable income. Although this income was offset by the Company's net operating loss, alternative minimum tax was applicable to the transaction. SPACEHAB's operating loss going forward will be restricted under the IRS guidelines resulting from the exchange transaction.
Additionally, during the nine-month period of fiscal year 2008, the Company completed performance on its last scheduled space shuttle module mission, STS-118. As a result, the Company's revenues were significantly below the first nine months for fiscal year 2007.
On March 31, 2008 SPACEHAB's cash and short-term investments were approximately $8.5 million, including restricted cash of $6.5 million. Restricted cash reflects payments in advance of milestones achieved on a contract to upgrade customer-specific pre-launch facilities at the Company's VAFB location.
In February 2008, Astrotech, a wholly owned subsidiary of SPACEHAB, entered into a $6 million financing facility, consisting of a $4.0 million term loan and a $2.0 million revolving credit facility, with Green Bank, N.A. The new financing facility is part of the Company's ongoing financial restructuring strategy providing capital as SPACEHAB pursues its new business opportunities as well as improving overall liquidity.
Update of Ongoing Operations
With the conclusion of SPACEHAB's last module mission during the nine month period, SPACEHAB has experienced a material decrease in its revenue. However, the Company continues to focus its efforts on improving overall liquidity through identifying and pursuing new business opportunities, within the areas of SPACEHAB core competencies, as well as significantly reducing operating expenses.
These core competencies are being maintained, re-engineered, and expanded through SPACEHAB's primary businesses, Astrotech Space Operations, SPACEHAB Engineering Services, and SPACETECH.
Astrotech has a long-term contract with United Launch Alliance (ULA), a joint venture company of Lockheed Martin and Boeing, to provide facilities and spacecraft processing services for Atlas V payloads through 2006, with contract options through 2010. Subsequent to quarter end, ULA executed a one-year option extension, valued at $3.1 million, through calendar year 2008.
SPACEHAB Engineering Services continues providing specialized services and products to NASA, and other government customers, including configuration and data management services within NASA's Program Integration and Control contract for the International Space Station.
SPACETECH, the Company's space technology transfer and commercial business development subsidiary, has recently reported developments in the areas of microgravity processing - through a partnership with Space Florida and two space shuttle missions carrying a proprietary infectious disease model - and its AirWard Container, currently the only product positioned to go to market that successfully meets the new Federal Aviation Administration CFR 49 regulation regarding thermal and impact resistance requirements.
About SPACEHAB, Incorporated
SPACEHAB is a commercial leader and entrepreneurial force in the space industry providing a full spectrum of products and services to both the government and private sectors. The Company offers space access and payload integration services, production of valuable commercial products in space, spacecraft pre-launch processing facilities and services, development and extension of space-based products to the consumer market, and program and engineering support ranging from development and manufacturing of flight hardware to large scale government project management.
The statements in this document may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act 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. 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.
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