UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
Commission file number 0-27206
SPACEHAB, Incorporated
12130 Galveston Road (Hwy 3)
Building 1
Webster, TX 77598
(713) 558-5000
| Incorporated in the State of Washington | IRS Employer Identification Number 91-1273737 |
The number of shares of Common Stock outstanding as of the close of business on January 5, 2004:
| Class |
Number of Shares Outstanding | |
| Common Stock |
12,435,827 |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act).
Yes ¨ No x
SPACEHAB, INCORPORATED AND SUBSIDIARIES
DECEMBER 31, 2003 QUARTERLY REPORT ON FORM 10-Q
| Page | ||||
| PART 1- FINANCIAL INFORMATION |
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| Item 1. | Unaudited Condensed Consolidated Financial Statements |
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| Unaudited Condensed Consolidated Balance Sheets as of December 31, 2003 and June 30, 2003 |
2 | |||
| 3 | ||||
| 4 | ||||
| Notes to Unaudited Condensed Consolidated Financial Statements |
5 | |||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | ||
| Item 3. | 21 | |||
| Item 4. | 21 | |||
| PART II- OTHER INFORMATION |
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| Item 1. | 22 | |||
| Item 4. | 22 | |||
| Item 6. | 23 | |||
1
PART 1: FINANCIAL INFORMATION
| Item 1. | UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| (In thousands, except share data) | December 31, 2003 |
June 30, 2003 |
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| (unaudited) | ||||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 5,873 | $ | 1,301 | ||||
| Restricted cash |
1,734 | — | ||||||
| Short-term investments |
4,579 | 14,047 | ||||||
| Restricted short-term investments |
4,428 | — | ||||||
| Accounts receivable, net |
6,873 | 6,780 | ||||||
| Prepaid expenses and other current assets |
787 | 343 | ||||||
| Total current assets |
24,274 | 22,471 | ||||||
| Property, plant, and equipment, net of accumulated depreciation and amortization of $50,368 and $48,700, respectively |
81,311 | 83,689 | ||||||
| Goodwill, net |
— | 8,274 | ||||||
| Investment in Guigne, net |
— | 1,800 | ||||||
| Other assets, net |
4,353 | 5,122 | ||||||
| Total assets |
$ | 109,938 | $ | 121,356 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Convertible notes payable to shareholder |
677 | 2,004 | ||||||
| Mortgage loan payable |
1,833 | 2,218 | ||||||
| Revolving loan payable |
3,989 | — | ||||||
| Accounts payable and accrued expenses |
6,556 | 7,283 | ||||||
| Accounts payable- EADS |
3,526 | 7,824 | ||||||
| Accrued subcontracting services |
765 | 522 | ||||||
| Deferred revenue |
11,073 | 7,370 | ||||||
| Other current liability |
1,334 | — | ||||||
| Total current liabilities |
29,753 | 27,221 | ||||||
| Accrued contract cost and other |
195 | 255 | ||||||
| Deferred revenue |
1,407 | 8,734 | ||||||
| Convertible subordinated notes payable |
63,250 | 63,250 | ||||||
| Mortgage loan payable |
4,667 | 14,860 | ||||||
| Other long-term liability |
— | 1,946 | ||||||
| Total liabilities |
99,272 | 116,266 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Preferred Stock, no par value, convertible, authorized 2,500,000 shares, issued and outstanding 1,333,334 shares, (liquidation preference of $12,000) |
11,892 | 11,892 | ||||||
| Common stock, no par value, authorized 30,000,000 shares, issued and outstanding 12,551,827 and 12,484,779 shares, respectively |
83,490 | 83,446 | ||||||
| Additional paid-in capital |
16 | 16 | ||||||
| Less treasury stock, 116,100 and 109,800 shares, respectively |
(117 | ) | (111 | ) | ||||
| Accumulated other comprehensive loss |
(542 | ) | (1,946 | ) | ||||
| Accumulated deficit |
(84,073 | ) | (88,207 | ) | ||||
| Total stockholders’ equity |
10,666 | 5,090 | ||||||
| Total liabilities and stockholders’ equity |
109,938 | 121,356 | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
| Three Months Ended December 31, |
Six Months Ended December 31, |
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| (In thousands, except share data) | 2003 |
2002 |
2003 |
2002 |
||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue |
$ | 32,816 | $ | 28,050 | $ | 51,666 | $ | 54,862 | ||||||||
| Costs of revenue |
12,830 | 22,758 | 26,357 | 44,393 | ||||||||||||
| Gross profit |
19,986 | 5,292 | 25,309 | 10,469 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
3,403 | 2,667 | 6,335 | 6,083 | ||||||||||||
| Research and development |
2 | 73 | 2 | 85 | ||||||||||||
| Goodwill impairment |
8,274 | — | 8,274 | — | ||||||||||||
| Impairment of investment in Guigne |
1,800 | — | 1,800 | — | ||||||||||||
| Total operating expenses |
13,479 | 2,740 | 16,411 | 6,168 | ||||||||||||
| Income from operations |
6,507 | 2,552 | 8,898 | 4,301 | ||||||||||||
| Interest expense |
(2,859 | ) | (1,839 | ) | (4,599 | ) | (3,699 | ) | ||||||||
| Interest and other income, net |
42 | (41 | ) | 75 | (30 | ) | ||||||||||
| Income before income taxes |
3,690 | 672 | 4,374 | 572 | ||||||||||||
| Income tax (expense) benefit |
(222 | ) | 503 | (240 | ) | 509 | ||||||||||
| Net income |
$ | 3,468 | $ | 1,175 | $ | 4,134 | $ | 1,081 | ||||||||
| Income per share |
||||||||||||||||
| Net income per share – basic |
$ | 0.28 | $ | 0.10 | $ | 0.33 | $ | 0.09 | ||||||||
| Shares used in computing net income per share – basic |
12,401,291 | 12,234,266 | 12,386,123 | 12,194,775 | ||||||||||||
| Net income per share – diluted |
$ | 0.25 | $ | 0.09 | $ | 0.30 | $ | 0.08 | ||||||||
| Shares used in computing net income per share – diluted |
13,897,126 | 13,606,199 | 13,810,998 | 13,558,802 | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
| Six Months Ended December 31, |
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| (In thousands) | 2003 |
2002 |
||||||
| Operating activities |
||||||||
| Net income |
$ | 4,134 | $ | 1,081 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
| Goodwill impairment |
8,274 | — | ||||||
| Impairment of investment in Guigne |
1,800 | — | ||||||
| Loss on hedge investment |
793 | — | ||||||
| Amortization of debt placement costs |
472 | 123 | ||||||
| Depreciation and amortization |
2,825 | 5,862 | ||||||
| Loss on asset sales and write-offs |
356 | — | ||||||
| Changes in assets and liabilities |
||||||||
| Increase in accounts receivable |
(93 | ) | (560 | ) | ||||
| Increase in prepaid expenses and other current assets |
(444 | ) | (258 | ) | ||||
| Decrease (increase) in other assets |
205 | (214 | ) | |||||
| Decrease in deferred revenue |
(3,624 | ) | (4,609 | ) | ||||
| Decrease in accounts payable and accrued expenses and accounts payable-EADS |
(5,025 | ) | (2,737 | ) | ||||
| Increase in accrued subcontracting services |
243 | 4,315 | ||||||
| Decrease in long-term contracts costs and other liabilities |
(60 | ) | — | |||||
| Net cash provided by operating activities |
9,856 | 3,003 | ||||||
| Investing activities |
||||||||
| Payments for flight assets under construction |
(74 | ) | (129 | ) | ||||
| Purchases of property, equipment and leasehold improvements |
(684 | ) | (497 | ) | ||||
| Proceeds received from sale of property and equipment |
46 | 125 | ||||||
| Proceeds from sale of investments |
5,040 | — | ||||||
| (Increase) decrease in restricted cash |
(1,734 | ) | 549 | |||||
| Net cash provided by investing activities |
2,594 | 48 | ||||||
| Financing activities |
||||||||
| Payment of loan payable |
— | (85 | ) | |||||
| Proceeds from issuance of common stock |
44 | 92 | ||||||
| Purchase of treasury stock |
(6 | ) | — | |||||
| Proceeds from (repayment of) revolving loan payable, net |
3,989 | (1,175 | ) | |||||
| Repayment of mortgage loan |
(10,578 | ) | (998 | ) | ||||
| Payment of convertible note payable to shareholder |
(1,327 | ) | (1,238 | ) | ||||