Press Release

SPACEHAB Reports Financial Results for Fiscal Year 2001

By SpaceRef Editor
October 15, 2001
Filed under , ,

SPACEHAB, Inc. , a
leading provider of commercial space services, today announced financial
results for its 2001 fiscal year and fourth quarter, which ended June 30,

For fiscal 2001, SPACEHAB revenue of $105.3 million remained essentially
unchanged from last year’s revenue of $105.7 million.
Fiscal year end
earnings before interest, taxes, depreciation and amortization (EBITDA)
totaled approximately $0.8 million.
Net loss for fiscal 2001 was $12.8
million or $1.12 per basic and diluted share compared to a net loss of $3.8
million or $0.34 per diluted share for the previous year.
Approximately 25
percent of the annual net loss was from a non-cash non-recurring charge ($3.3
million), and approximately 45 percent of the annual loss from operations
resulted from operations that have been curtailed or discontinued.

For the fourth quarter of fiscal 2001, revenue increased 4.2 percent to
$29.9 million from $28.7 million the year before.
Net loss for the fourth
quarter was $5.6 million compared to income of $22,000 for the fourth quarter
of fiscal 2000.
Fourth quarter EBITDA were $2.4 million, an indication of
improvement in operating performance.
Basic and diluted loss per share for
the fiscal 2001 fourth quarter was $0.49 compared to earnings of $0.00 per
share for the same quarter in fiscal 2000.

SPACEHAB recorded approximately $13.9 million of non-cash charges
involving depreciation, amortization, required reserves and a one-time charge
to establish a full valuation allowance on deferred tax assets.

Excluding losses attributable to business operations that have been
curtailed or disposed of since January 1, 2001 and the one-time deferred tax
asset write-down, SPACEHAB would have recorded a $7.8 million loss from
operations for fiscal 2001, compared to the $13.7 million operating loss

“At the beginning of the third quarter of fiscal 2001, management
responded to continued delays in its human space and satellite markets by
implementing a multi-faceted plan to improve SPACEHAB’s financial health.
reorganized our operations to focus on core business, arranged for sales of
non-core assets, and initiated a cost-reduction campaign to strengthen our
cash position and establish profitable operations,” said SPACEHAB Chairman and
Chief Executive Officer Dr. Shelley A. Harrison.
“Since the close of fiscal
2001, we’ve signed a long-term representation agreement with Astrium for our
Integrated Cargo Carrier program, completed a $20 million financing for
Astrotech’s Florida facility expansion, had Space Media take on a venture
capital partner with a $750,000 investment, and retired a balance of more than
$3 million owed to CIT/Equipment Financing, thereby improving our overall
Our fiscal 2001 operating loss included a $900,000 loss from the
Johnson Engineering filter housing operations and a $200,000 loss from the
Astrotech Oriole sounding rocket project — both sold subsequent to year-end
for a total of $2.1 million.
We also recorded a $4.8 million startup loss for
Space Media.”

“Certain elements of our financial and liquidity plan were not complete in
time for the filing of SPACEHAB’s audited financial statements: definitization
of equitable adjustment with NASA on STS-107 delays from October 2001 through
next year’s scheduled launch, rescheduling of our debt with Alenia,
restructuring of the terms of our line of credit with Bank of America, and
final negotiations for several new NASA missions,” said Dr. Harrison.
“Consequently, SPACEHAB’s external auditors, Ernst & Young LLP, have issued an
opinion on our 2001 consolidated financial statements that raises questions
with regard to SPACEHAB’s ability to continue as a going concern. While this
opinion is disappointing, we remain committed to completing the final elements
of our business and financial plans, which will provide sufficient liquidity
through 2002 and beyond.”

Several factors affected SPACEHAB’s financial performance for fiscal 2001.
While the partners in the International Space Station (ISS) executed an
ambitious series of assembly missions over the past year, the station is not
yet available for full-fledged habitation, research operations and commercial
Launch dates for SPACEHAB ISS resupply missions booked in fiscal
1999-2000 slipped to fiscal 2001-2002.
SPACEHAB’s gross margins decreased
from fiscal 2000 to 2001 in part because of changes in the nature and mix of
SPACEHAB’s Space Shuttle missions (limited research and resupply missions,
only one flight of a double module).
NASA postponed the launch of Shuttle
mission STS-107, which will mark the first flight of SPACEHAB’s Research
Double Module (flight contract value $65 million, asset value $101 million).
STS-107 originally was scheduled to launch in May 2000 and is currently
scheduled for launch in May 2002.
SPACEHAB has completed negotiations with
NASA for a $26.7 million equitable adjustment payment to compensate for costs
incurred through September 2001 because of this delay.
Further adjustments
are expected to cover the period from October 2001 through launch.

Restructuring in the satellite communications industry has temporarily
slowed payload processing activities for SPACEHAB’s Astrotech subsidiary, but
revenue under existing contracts is expected to rise in fiscal 2002.

SPACEHAB continued to incur startup costs for its majority-owned
subsidiary, Space Media, Inc. (SMI), throughout fiscal 2001.
In January 2001,
SPACEHAB reorganized the subsidiary to focus on near-term market prospects,
enabling a downsizing of operations to manage startup costs and return on
Space Media is now concentrating on the operation of its STARS
Academy global education program ( ) and online
retailing through The Space Store ( ).
September 2001, SMI received a $750,000 equity investment from escottVentures
II, LLC, of Melbourne, Florida.
SMI intends to use this venture capital
investment to help build worldwide enrollment in STARS Academy and sales for
The Space Store.

For the fiscal year ended June 30, 2001, revenue included $45 million
recognized from Space Flight Services contracts in support of Space Shuttle
missions, including SPACEHAB’s Research and Logistics Mission Support (REALMS)
contract with NASA and contracts with commercial customers to fly experiments
and other payloads; $53.5 million from SPACEHAB’s Johnson Engineering (JE)
unit, primarily under contracts with NASA’s Johnson Space Center; $6.2 million
contributed by SPACEHAB’s Astrotech subsidiary for satellite processing; and
$0.5 million for Space Media.
In comparison, for the fiscal year ended June
30, 2000, revenue of $39.6 million was recognized from Space Shuttle missions,
$58.2 million from JE (formerly Engineering Services), $7.6 million from
Astrotech, and $0.3 million from miscellaneous sources (Space Media did not
report revenues for FY 2000).

“SPACEHAB is pressing hard to regain profitability on our existing
business backlog while pursuing core areas of new business growth,” said
SPACEHAB President and Chief Operating Officer Michael E. Kearney. “We are
dedicated to providing first-rate, affordable, user-friendly end-to-end
services. We aim to continue expanding our customer base, extending our global
reach, building new strategic partnerships and strengthening existing
alliances, while maintaining our reputation for quality and innovation.”

Founded in 1984, with more than $100 million in annual revenue, SPACEHAB,
Inc., is a leading provider of commercial space services. SPACEHAB develops,
owns, and operates habitat and laboratory modules and cargo carriers aboard
NASA’s Space Shuttles. It also supports astronaut training and space station
configuration management at NASA’s Johnson Space Center in Houston and builds
space-flight trainers and mockups. SPACEHAB’s Astrotech subsidiary provides
commercial satellite processing services at facilities in Florida and
SPACEHAB’s newest strategic growth initiative, SPACEHAB
Huntsville, will provide customer-focused end-to-end services to the space
research community at NASA’s Marshall Space Flight Center in Huntsville,
SPACEHAB’s Space Media, Inc.(TM), unit brings space into homes and
classrooms worldwide with interactive education programs through STARS Academy
( ), and space merchandise from The Space Store
( ).

This release may contain 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 SPACEHAB will fully
realize the economic benefits under its NASA and other customer contracts, the
timing and mix of Space Shuttle missions, the successful development and
commercialization of new space assets, technological difficulties, product
demand, timing of new contracts, launches and business, market acceptance
risks, the effect of economic conditions, uncertainty in government funding,
the impact of competition, and other risks detailed in the SPACEHAB’s
Securities and Exchange Commission filings.

  • Linda Billings
    Julia A. Pulzone

  • Director of Communications
    Chief Financial Officer

  • SPACEHAB, Inc.
    SPACEHAB, Inc.

  • 202-488-3500; toll-free 888-647-9543
    202-488-3500; toll-free 888-647-9543


Note: An audiotape of SPACEHAB’s conference call with investors will be
available after 2 p.m. EDT Tuesday October16, 2001, at:

  • Unaudited Condensed Consolidated Statements of Operations
  • (in thousands, except share data)

Three Months

Ended June 30,
Ended June 30,



Costs of revenue

Gross profit

Operating expenses:

Selling, general

and administrative

Research and


Total operating



from operations

Interest expense,

net of capitalized


Interest and other

income, net

Loss before

income taxes

Income tax expense (1)

Income tax benefit

        Net loss           $(5,594)          $22     $(12,785)      $(3,844)
    Basic loss per share:
    Net loss per
      share - basic         $(0.49)       $(0.00)      $(1.12)       $(0.34)
    Shares used in
      computing net
       loss per
        share - basic   11,462,897    11,315,905   11,400,482    11,272,767
    Diluted loss
      per share:
    Net loss per
      share - diluted       $(0.49)       $(0.00)      $(1.12)       $(0.34)
    Shares used in
      computing net
       loss             11,462,897    11,315,905   11,400,482    11,272,767

    (1) The Company recorded a non-cash non-recurring charge to establish a
        full valuation allowance on its deferred tax asset as of
        June 30, 2001.

SpaceRef staff editor.