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 March 31, 2004
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 April 22, 2004:
| Class |
Number of Shares Outstanding | |
| Common Stock | 12,562,240 |
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
MARCH 31, 2004 QUARTERLY REPORT ON FORM 10-Q
| Page | ||||
| PART 1 - |
FINANCIAL INFORMATION | |||
| Item 1. |
Unaudited Condensed Consolidated Financial Statements | |||
| Unaudited Condensed Consolidated Balance Sheets as of March 31, 2004 and June 30, 2003 | 2 | |||
| Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2004 and 2003 | 3 | |||
| Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2004 and 2003 | 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. |
Quantitative and Qualitative Disclosures about Market Risk | 22 | ||
| Item 4. |
Controls and Procedures | 22 | ||
| PART II - |
OTHER INFORMATION | |||
| Item 1. |
Legal Proceedings | 22 | ||
| Item 2. |
Changes in Securities | 23 | ||
| Item 4. |
Submission of Matters to a Vote of Security Holders | 23 | ||
| Item 6. |
Exhibits and Reports on Form 8-K | 23 | ||
1
PART 1: FINANCIAL INFORMATION
| ITEM 1. | Unaudited Condensed Consolidated Financial Statements |
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share data)
| March 31, 2004 |
June 30, 2003 |
|||||||
| ASSETS | ||||||||
| Cash and cash equivalents |
$ | 2,044 | $ | 1,301 | ||||
| Short-term investments |
6,628 | 14,047 | ||||||
| Accounts receivable, net |
5,827 | 6,780 | ||||||
| Prepaid expenses and other current assets |
672 | 343 | ||||||
| Total current assets |
15,171 | 22,471 | ||||||
| Property, plant, and equipment, net of accumulated depreciation and amortization of $51,732 and $48,700, respectively |
80,482 | 83,689 | ||||||
| Goodwill, net |
— | 8,274 | ||||||
| Investment in Guigne, net |
— | 1,800 | ||||||
| Other assets, net |
4,314 | 5,122 | ||||||
| Total assets |
$ | 99,967 | $ | 121,356 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Convertible notes payable to shareholder |
— | 2,004 | ||||||
| Mortgage loan payable |
1,923 | 2,218 | ||||||
| Accounts payable and accrued expenses |
7,474 | 7,283 | ||||||
| Accounts payable-EADS |
3,221 | 7,824 | ||||||
| Accrued subcontracting services |
534 | 522 | ||||||
| Deferred revenue |
6,296 | 7,370 | ||||||
| Total current liabilities |
19,448 | 27,221 | ||||||
| Accrued contract cost and other |
161 | 255 | ||||||
| Deferred revenue |
1,227 | 8,734 | ||||||
| Convertible subordinated notes payable |
63,250 | 63,250 | ||||||
| Mortgage loan payable |
4,177 | 14,860 | ||||||
| Other long-term liability |
— | 1,946 | ||||||
| Total liabilities |
88,263 | 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 12,678,340 and 12,484,779 shares, respectively |
83,719 | 83,446 | ||||||
| Additional paid-in capital |
16 | 16 | ||||||
| Less treasury stock, 116,100 and 109,800 shares, respectively |
(117 | ) | (111 | ) | ||||
| Accumulated other comprehensive loss |
— | (1,946 | ) | |||||
| Accumulated deficit |
(83,806 | ) | (88,207 | ) | ||||
| Total stockholders’ equity |
11,704 | 5,090 | ||||||
| Total liabilities and stockholders’ equity |
$ | 99,967 | $ | 121,356 | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except share data)
| (Unaudited) | (Unaudited) | |||||||||||||||
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenue |
$ | 14,800 | $ | 26,413 | $ | 66,466 | $ | 81,275 | ||||||||
| Costs of revenue |
9,815 | 22,123 | 36,172 | 66,516 | ||||||||||||
| Gross profit |
4,985 | 4,290 | 30,294 | 14,759 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
2,545 | 3,146 | 8,880 | 9,229 | ||||||||||||
| Research and development |
7 | 20 | 9 | 105 | ||||||||||||
| Nonrecurring charge, loss of Research Double Module |
— | 50,268 | — | 50,268 | ||||||||||||
| Goodwill impairment |
— | 11,925 | 8,274 | 11,925 | ||||||||||||
| Impairment of investment in Guigne |
— | — | 1,800 | — | ||||||||||||
| Total operating expenses |
2,552 | 65,359 | 18,963 | 71,527 | ||||||||||||
| Income from operations |
2,433 | (61,069 | ) | 11,331 | (56,768 | ) | ||||||||||
| Interest expense |
(2,177 | ) | (1,842 | ) | (6,776 | ) | (5,541 | ) | ||||||||
| Interest and other income (expense), net |
22 | (26 | ) | 97 | (56 | ) | ||||||||||
| Income before income taxes |
278 | (62,937 | ) | 4,652 | (62,365 | ) | ||||||||||
| Income tax (expense) benefit |
(11 | ) | 218 | (251 | ) | 727 | ||||||||||
| Net income (loss) |
$ | 267 | $ | (62,719 | ) | $ | 4,401 | $ | (61,638 | ) | ||||||
| Income (loss) per share |
||||||||||||||||
| Net income (loss) per share – basic |
$ | 0.02 | $ | (5.06 | ) | $ | 0.35 | $ | (5.03 | ) | ||||||
| Shares used in computing net income (loss) per share – basic |
12,476,342 | 12,398,775 | 12,415,977 | 12,263,426 | ||||||||||||
| Net income (loss) per share – diluted |
$ | 0.02 | $ | (5.06 | ) | $ | 0.31 | $ | (5.03 | ) | ||||||
| Shares used in computing net income (loss) per share – diluted |
14,264,818 | 12,398,775 | 14,039,798 | 12,263,426 | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
| (In thousands) | Nine Months Ended March 31, |
|||||||
| 2004 |
2003 |
|||||||
| Operating activities |
||||||||
| Net income (loss) |
$ | 4,401 | $ | (61,638 | ) | |||
| Adjustments to reconcile net income (loss) to Net cash provided by operating activities |
||||||||
| Goodwill impairment |
8,274 | 11,925 | ||||||
| Nonrecurring charge, loss of Research Double Module |
— | 50,268 | ||||||
| Proceeds from insurance |
— | 17,667 | ||||||
| Impairment of investment in Guigne |
1,800 | — | ||||||
| Acceleration of debt placement costs |
729 | — | ||||||
| Depreciation and amortization |
4,206 | 7,063 | ||||||
| Loss on asset sales and write-offs |
358 | — | ||||||
| Changes in assets and liabilities: |
||||||||
| Decrease in accounts receivable |
953 | 2,752 | ||||||
| Increase in prepaid expenses and other current assets |
(329 | ) | (261 | ) | ||||
| (Increase) decrease in other assets |
(30 | ) | 165 | |||||
| Decrease in deferred revenue |
(8,581 | ) | (8,439 | ) | ||||
| (Decrease) increase in accounts payable and accrued expenses and accounts payable-EADS |
(4,412 | ) | 220 | |||||
| Increase in accrued subcontracting services |
12 | 3,531 | ||||||
| Decrease in long-term contracts costs and other liabilities |
(94 | ) | — | |||||
| Net cash provided by operating activities |
7,287 | 23,253 | ||||||
| Investing activities |
||||||||
| Payments for flight assets under construction |
(426 | ) | (136 | ) | ||||
| Purchases of property, equipment and leasehold improvements |
(868 | ) | (470 | ) | ||||
| Proceeds received from sale of property and equipment |
46 | 125 | ||||||
| Proceeds from state grant |
— | 750 | ||||||
| Proceeds from sale of investments |
7,419 | — | ||||||
| Increase in investments |
— | (16,503 | ) | |||||
| Decrease in restricted cash |
— | 549 | ||||||
| Net cash provided by (used in) investing activities |
6,171 | (15,685 | ) | |||||
| Financing activities |
||||||||
| Payment of loan payable |
— | (218 | ) | |||||
| Proceeds from issuance of common stock |
273 | 125 | ||||||
| Purchase of treasury stock |
(6 | ) | (37 | ) | ||||
| Repayment of revolving loan payable, net |
— | (2,150 | ) | |||||
| Repayment of mortgage loan |
(10,978 | ) | (1,513 | ) | ||||
| Payment of convertible notes payable to shareholder |
(2,004 | ) | (1,889 | |||||