UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2005
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from to
Commission File No. 0-27206
SPACEHAB, Incorporated
(Exact name of registrant as specified in this charter)
| Washington | 91-1273737 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
12130 Highway 3, Building 1
Webster, Texas 77598-1504
(713) 558-5000
(Address of principal executive offices, including zip code, and telephone number)
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
As of May 12, 2005 there were 12,644,127 shares of the registrant’s common stock outstanding.
SPACEHAB, INCORPORATED AND SUBSIDIARIES
MARCH 31, 2005 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
| Page | ||||
| 2 | ||||
| PART 1 - |
||||
| Item 1. |
3 | |||
| Unaudited Condensed Consolidated Balance Sheets as of March 31, 2005 and June 30, 2004 |
3 | |||
| 4 | ||||
| 5 | ||||
| Notes to Unaudited Condensed Consolidated Financial Statements |
6 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 | ||
| Item 3. |
26 | |||
| Item 4. |
26 | |||
| PART II - |
||||
| Item 1. |
27 | |||
| Item 6. |
28 | |||
1
As used in this Form 10-Q, the abbreviations and acronyms contained herein have the meanings set forth below. Additionally, the terms “SPACEHAB”, “the Company”, “we”, “us” and “our” refer to SPACEHAB, Incorporated and its subsidiaries, unless the context clearly indicates otherwise.
| APB | Accounting Principles Board | |
| ASO | Astrotech Space Operations | |
| Astrotech | Astrotech Space Operations | |
| Boeing | The Boeing Company | |
| CCTS | Commercial Cargo Transportation Services | |
| CE&R | Concept Exploration and Refinement | |
| CM | Configuration Management | |
| CMC | Cargo Mission Contract | |
| Common Stock | SPACEHAB common stock | |
| EADS | EADS Space Transportation | |
| EELV | Evolved Expendable Launch Vehicle | |
| EPS | Earnings Per Share | |
| ESP2 | External Stowage Platform 2 | |
| ESP3 | External Stowage Platform 3 | |
| FASB | Financial Accounting Standards Board | |
| FCSD | Flight Crew Systems Development | |
| ICC | Integrated Cargo Carrier | |
| ISS | International Space Station | |
| JAXA | Japan Aerospace Exploration Agency | |
| JE | Johnson Engineering Corporation | |
| JETIS | Japanese Experiment Thermal Incubator Service | |
| Lloyd’s | Lloyd’s of London | |
| Lockheed Martin | Lockheed Martin Corporation | |
| MIC | Mission Integration Contract | |
| NASA | National Aeronautics and Space Administration | |
| ORU | Orbital Replacement Unit | |
| PI&C | Program Integration and Control | |
| RDM | Research Double Module | |
| ReALMS | Research and Logistics Mission Support | |
| RSC-Energia | Rocket Space Corporation – Energia | |
| SEC | Securities and Exchange Commission | |
| SEDC | Stowage, Engineering and Decal Contract | |
| SFAS | Statement of Financial Accounting Standards | |
| SFS | SPACEHAB Flight Services | |
| SGS | SPACEHAB Government Services | |
| SMI | Space Media, Inc. | |
| SPF | Spacecraft Processing Facility | |
| SPPF | SPACEHAB Payload Processing Facility (Cape Canaveral, FL) | |
| VCC | Vertical Cargo Carrier |
2
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share data)
| March 31, 2005 |
June 30, 2004 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 5,122 | $ | 506 | ||||
| Restricted cash |
872 | 430 | ||||||
| Short-term investments |
— | 5,037 | ||||||
| Restricted short-term investments |
— | 1,604 | ||||||
| Accounts receivable, net |
9,459 | 7,878 | ||||||
| Prepaid expenses and other current assets |
895 | 495 | ||||||
| Total current assets |
16,348 | 15,950 | ||||||
| Property and equipment, net of accumulated depreciation and |
||||||||
| amortization of $53,640 and $49,755, respectively |
76,530 | 79,600 | ||||||
| Deferred financing costs, net |
1,048 | 1,163 | ||||||
| Other assets, net |
1,799 | 3,212 | ||||||
| Total assets |
$ | 95,725 | $ | 99,925 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Revolving loan payable |
$ | — | $ | 1,445 | ||||
| Mortgage loan payable, current portion |
1,946 | 1,946 | ||||||
| Accounts payable |
1,335 | 2,424 | ||||||
| Accounts payable-EADS |
1,057 | 3,262 | ||||||
| Accrued interest |
2,358 | 1,108 | ||||||
| Accrued expenses |
2,414 | 3,600 | ||||||
| Accrued subcontracting services |
3,752 | 2,176 | ||||||
| Deferred revenue, current portion |
2,429 | 6,340 | ||||||
| Total current liabilities |
15,291 | 22,301 | ||||||
| Accrued contract cost and other |
255 | 372 | ||||||
| Deferred revenue, net of current portion |
— | 900 | ||||||
| Mortgage loan payable, net of current portion |
2,244 | 3,692 | ||||||
| Convertible subordinated notes payable |
63,250 | 63,250 | ||||||
| Total liabilities |
81,040 | 90,515 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Preferred Stock, no par value, convertible, 2,500,000 shares authorized, 1,333,334 shares issued and outstanding, (liquidation preference of $12.00 per share) |
11,892 | 11,892 | ||||||
| Common stock, no par value, 30,000,000 shares authorized, 12,760,227 and 12,688,062 shares issued, respectively |
83,857 | 83,751 | ||||||
| Additional paid-in capital |
16 | 16 | ||||||
| Treasury stock, 116,100 and 116,100 shares, respectively, at cost |
(117 | ) | (117 | ) | ||||
| Accumulated deficit |
(80,963 | ) | (86,132 | ) | ||||
| Total stockholders’ equity |
14,685 | 9,410 | ||||||
| Total liabilities and stockholders’ equity |
$ | 95,725 | $ | 99,925 | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except share data)
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
| 2005 |
2004 |
2005 |
2004 |
|||||||||||||
| Revenue |
$ | 14,272 | $ | 14,800 | $ | 40,443 | $ | 66,466 | ||||||||
| Costs of revenue |
11,085 | 9,815 | 32,592 | 36,172 | ||||||||||||
| Gross profit |
3,187 | 4,985 | 7,851 | 30,294 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
2,321 | 2,545 | 6,556 | 8,880 | ||||||||||||
| Research and development |
21 | 7 | 37 | 9 | ||||||||||||
| Goodwill impairment |
— | — | — | 8,274 | ||||||||||||
| Impairment of investment in Guigne |
— | — | — | 1,800 | ||||||||||||
| Recovery of nonrecurring charge, loss of Research Double Module |
— | — | (8,244 | ) | — | |||||||||||
| Total operating expenses |
2,342 | 2,552 | (1,651 | ) | 18,963 | |||||||||||
| Income from operations |
845 | 2,433 | 9,502 | 11,331 | ||||||||||||
| Interest expense |
(1,413 | ) | (2,177 | ) | (4,299 | ) | (6,776 | ) | ||||||||
| Interest and other income, net |
40 | 22 | 121 | 97 | ||||||||||||
| Income (loss) before income taxes |
(528 | ) | 278 | 5,324 | 4,652 | |||||||||||
| Income tax expense |
(13 | ) | (11 | ) | (155 | ) | (251 | ) | ||||||||
| Net income (loss) |
$ | (541 | ) | $ | 267 | $ | 5,169 | $ | 4,401 | |||||||
| Income (loss) per share: |
||||||||||||||||
| Net income (loss) per share – basic |
$ | (0.04 | ) | $ | 0.02 | $ | 0.41 | $ | 0.35 | |||||||
| Shares used in computing net income (loss) per share – basic |
12,626,130 | 12,476,342 | 12,603,240 | 12,415,977 | ||||||||||||
| Net income (loss) per share – diluted |
$ | (0.04 | ) | $ | 0.02 | $ | 0.36 | $ | 0.31 | |||||||
| Shares used in computing net income (loss) per share – diluted |
12,626,130 | 14,264,818 | 14,203,597 | 14,039,798 | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
SPACEHAB, INCORPORATED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
| Nine Months Ended March 31, |
||||||||
| 2005 |
2004 |
|||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ | 5,169 | $ | 4,401 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Goodwill impairment |
— | 8,274 | ||||||
| Impairment of investment in Guigne |
— | 1,800 | ||||||
| Amortization of debt placement costs |
— | 729 | ||||||
| Depreciation and amortization |
3,953 | 4,206 | ||||||
| Loss on asset sales and write-offs |
29 | 358 | ||||||
| Changes in assets and liabilities: |
||||||||
| (Increase) decrease in accounts receivable |
(1,581 | ) | 953 | |||||
| Increase in prepaid expenses and other current assets |
(400 | ) | (329 | ) | ||||
| (Increase) decrease in other assets |
1,413 | (30 | ) | |||||
| Decrease in accounts payable, accounts payable-EADS, accrued interest, and accrued expenses |
(3,230 | ) | (4,412 | ) | ||||
| Increase in accrued subcontracting services |
1,576 | 12 | ||||||
| Decrease in deferred revenue |
(4,811 | ) | (8,581 | ) | ||||
| Decrease in long-term contracts costs and other liabilities |
(117 | ) | (94 | ) | ||||
| Net cash provided by operating activities |
2,001 | 7,287 | ||||||
| Cash flows from investing activities |
||||||||
| Payments for flight assets under construction |
(62 | ) | (426 | ) | ||||
| Purchases of property, equipment and leasehold improvements |
(750 | ) | (868 | ) | ||||
| Proceeds received from sale of property and equipment |
15 | 46 | ||||||