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News Release For Immediate Release
For more information:
Vienna, Virginia, September 10, 1997 — SPACEHAB, Inc., (NASDAQ: SPAB) today announced financial results for its fiscal 1997 fourth quarter and full year, which ended June 30, 1997. For the fourth quarter of fiscal 1997, the Company recorded revenue of $18.5 million primarily from the third mission completed in the fiscal year. Net income for the quarter was $3.4 million, or $0.30 per share calculated on 11.2 million shares outstanding. For the comparable quarter ending June 30, 1996, the Company recognized revenue of $56.4 million from its only two missions in fiscal 1996 and reported net income of $41.1 million, or $3.66 per share calculated on 11.2 million shares outstanding. The majority of SPACEHAB's fiscal 1997 fourth-quarter revenue was earned under its NASA contract using the SPACEHAB Logistics Double Module to resupply the Russian space station Mir. Approximately $4.0 million was from new contracts to perform experiments on the Space Shuttle for the Japanese and European space agencies (NASDA and ESA). In the fourth quarter, SPACEHAB announced two new business alliances-one with the United Space Alliance (USA), a Boeing and Lockheed Martin joint venture, and the other with RSC Energia (a Russian space Company). Together, USA and SPACEHAB will develop commercial markets for Space Shuttle and International Space Station (ISS) utilization support. SPACEHAB's agreement with RSC Energia is to pursue remaining science and industrial opportunities on Mir and, more importantly, develop long-term commercial services aboard the Russian segments of the ISS. Additionally, SPACEHAB initiated its "incubator" program, which allows companies engaged in R&D to perform experiments on SPACEHAB's Modules in return for a future royalty or other financial interest in the technologies and products the research yields. In the fourth quarter, the versatile design of SPACEHAB's Logistics Double Module allowed research for two pharmaceutical companies to be "piggy-backed"on the May 15, 1997, Mir resupply mission. For fiscal 1997, the Company reported revenue of $56.6 million, slightly higher than the $56.4 million reported for fiscal 1996. In 1996, SPACEHAB changed its fiscal year-end from September 30 to June 30, so fiscal 1996 included only nine months. Fiscal 1997 net income totaled $13.8 million, or $1.24 per share calculated on 11.1 million shares outstanding. A $4.2 million reduction in long-term debt, pursuant to a refinancing of SPACEHAB's existing credit agreement in the first quarter of fiscal 1997, gave rise to an extraordinary net gain of $3.3 million, or $0.29 per share, included in net income for fiscal 1997. For fiscal 1996, net income was $29.8 million, or $3.21 per share calculated on 9.3 million shares outstanding. "SPACEHAB has successfully initiated our revenue diversification plan, broadening our customer base,"said Dr. Shelley A. Harrison, SPACEHAB's Chairman and Chief Executive Officer. "Approximately $42 million, or three-quarters, of the Company's revenue in fiscal 1997 came from three Mir resupply missions. The completion of the CMAM (Commercial Middeck Augmentation Module) contract for science experiments and new contracts for the Japanese and European space agencies accounted for approximately $12 million. ASTROTECH contributed $2.9 million toward the year's revenue after its acquisition was completed on February 12, 1997, capturing substantial market share in the complementary space activity of telecommunications satellite payload processing." "Our contracts with NASDA and ESA allowed us to begin recognizing revenue ratably over the period of performance, rather than at a mission's conclusion," Dr. Harrison added. "By fiscal 1999, all our contracts should be accounted for in this manner, which will make quarter-to-quarter and year-to-year comparisons more relevant for measuring our actual performance." The Company's current backlog for fiscal 1998 is approximately $48.5 million, including three additional Mir resupply missions, currently scheduled for September 1997, January 1998, and May 1998. At June 30, 1997, the balance sheet listed $12.9 million in cash and marketable securities. Also at June 30, 1997, the balance sheet listed long-term debt of $12.7 million, which is only 13 percent of total capitalization. "NASA is the primary customer for continued research and Mir resupply missions in our human spaceflight operations for fiscal 1998," Dr. Harrison stated. "Uncertainties regarding timing of the start of construction of the ISS and the related strain on NASA's budget led to pricing pressure from NASA in fiscal 1997. Budgetary pressures within the agency continue, and we anticipate these pressures will likely result in some timing delays for contracts with a corresponding reduction in net income for fiscal 1998." During fiscal 1998, SPACEHAB will continue to invest in people, R&D, and new assets, also impacting the Company's net income in the short run. The Company's long-term value is derived from its ability to anticipate customer requirements and to design and develop proprietary assets that capture significant market share in two areas: (1) services for continuing research aboard the Space Shuttles and (2) payload processing and logistics resupply and attached hardware for the ISS during its projected 25 year operating life. "NASA recently announced plans to use our Single and Double Modules with integration and operations support for STS-95 and STS-96, which are missions currently scheduled for October 1998 and December 1998," Dr. Harrison said. "Although these missions have been identified as sole-source missions for SPACEHAB, contracting delays have pushed revenues anticipated for fiscal year 1998 into our fiscal 1999 and beyond. These sole-source missions are expected to be the first of a series supporting both the continuing demand for microgravity research during the multiyear ISS assembly phase and thereafter and the logistics resupply needs of the ISS during its assembly and operational phases. These additional missions open more flight opportunities for SPACEHAB's Science Modules. As ISS assembly progresses, SPACEHAB's Modules for pressurized logistics and science and our new Integrated Cargo Carrier for unpressurized logistics position the Company to extend its successful science and logistics experience to the ISS." "We ended fiscal 1997 as the preeminent private-sector supplier of products and services for human space flight operations as well as telecommunications satellite payload processing,"Dr. Harrison added. "We plan to continue to invest heavily in new assets that will reinforce our leadership position." SPACEHAB, Inc., with its ASTROTECH subsidiary, is the world's leading provider of commercial payload processing services for both unmanned and astronaut-tended payloads. SPACEHAB is the first Company to commercially develop, own and operate habitable Modules that provide space-based laboratory facilities and logistics resupply services aboard the U.S. Space Shuttles to support people living and working in space. 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 successful development and commercialization of new commercial space assets, technological difficulties, product demand, timing of new contracts 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
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