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SpaceDev Reports Third Quarter Net Income

Published by Sigurd De Keyser on Wed Nov 16, 2005 5:26 pm
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PRESS RELEASE; Successful Execution on Current Contracts Leads to Eleventh Consecutive Quarter of Revenue Growth

POWAY, CA –November 15, 2005 – SpaceDev, Inc. (OTCBB: SPDV) reported its financial results for the third quarter ended September 30, 2005. After eleven successive quarters of increasing net sales and eight quarters of increasing EBITDA*, SpaceDev achieved its third consecutive quarter of net income and maintained a positive cash flow from operations.

Net sales increased approximately 82%, to $2,234,000, for the three-months ended September 30, 2005 compared to $1,230,000 for the same three months in 2004. This increase was primarily due to execution on current contracts, including a second task order with the Missile Defense Agency valued at approximately $8.3 million. This current task order commenced October 2004 and is part of a larger contract with the Missile Defense Agency.

“SpaceDev moved forward some important strategic developments this quarter and continued its efforts to expand significantly our private sector space program,” commented Jim Benson, SpaceDev’s Founding Chairman and Chief Executive Officer. “Our recent merger agreement with Starsys, along with our continued expectation of our business plan, are important steps toward our goal of being a leader in the industry, by providing unique and cost-effective space solutions.”

SpaceDev continued to achieve income from operations for the seventh consecutive quarter. Income from operations was $83,000 for the three months ended September 30, 2005, compared to $49,000 for the same three months in 2004. Also, during the third quarter of 2005, EBITDA increased to $127,000, or 5.7% of net sales, compared to EBITDA of $72,000, or 5.9% of net sales, for the same three-month period in 2004. EBITDA is a non-GAAP financial measure defined as earnings before net interest income (expense), taxes, depreciation and amortization.*

Net income for the three and nine months ending September 30, 2005 was $136,000 and $348,000, or $0.01 and $0.02 per share, respectively, compared to a net loss of $603,000 and $2,332,000, or ($0.03) and ($0.13) per share, for the comparable periods in 2004. The increase in net income was mainly due to our reduction of non-cash loan fees that we incurred in 2004 of over $2.0 million for the nine months ended September 30, 2004. SpaceDev has had no non-cash loan fees attributed to borrowing under the current revolving credit facility in 2005; however, a small non-cash loan fee was expensed when warrants were exercised in the second quarter of 2005 that were originally associated with the establishment of the revolving credit facility.

“SpaceDev is committed to build its business profitably on the growth of the private space industry both through our existing business and acquisitions. Both components of our strategy have taken big steps forward. Our ongoing business profitably executed on large existing contracts for high performance, low cost satellite, spacecraft and propulsion systems. On the acquisition side, we recently entered into a merger agreement with Starsys that we believe will empower us to win larger and more diverse contracts in the future,” commented Richard Slansky, President and Chief Financial Officer of SpaceDev.

Net cash provided by operating activities totaled $313,000 for the nine months ended September 30, 2005, an improvement of $247,000 as compared to $66,000 used in operating activities during the same nine-month period in 2004. The positive trend in our current cash position was mainly due to our ability to generate net income of $136,000 and $348,000 for the three- and nine-month periods ended September 30, 2005, respectively, versus net losses of $603,000 and $2,332,000 for the same three- and nine-month periods in 2004.

Net cash decreased to $4,022,000 at September 30, 2005, a decrease of $57,000 from $4,079,000 at September 30, 2004. The decrease in net cash was due to uses of cash, such as the Starsys bridge loan on September 8, 2005 offset by the issuance of our Series C Preferred Stock in 2004, the exercise of stock options and warrants from October 1, 2004 through September 30, 2005 and advances/conversions under our revolving credit facility in late 2004. The financing, combined with the conversions and exercises, has resulted in a positive stockholders’ equity of $5,408,000 at September 30, 2005 from $3,076,000 at September 30, 2004. This is an improvement in stockholders equity of over $2.3 million.

Mr. Benson concluded, “This quarter reflects our ongoing concerted corporate initiative to continue improving our balance sheet and growing this business profitably. We believe our merger with Starsys will substantially increase our technical capabilities and our revenue run rate post-merger and should provide many benefits to drive growth and create sustainable long term earnings growth for our investors.”

Third Quarter Conference Call Details

SpaceDev will host a conference call later today at 12:00 p.m. EST to discuss the third quarter results. All those interested in hearing management’s discussion may join the call by dialing 877-407-9205. International participants may access the call by dialing 201-689-8054. A replay will be available for one week following the call by dialing 877-660-6853 for domestic participants and 201-612-7415 for international participants and entering passcode 286 and conference ID number 176748 when prompted. Participants may also access a live webcast of the conference call through the investor relations section of SpaceDev’s web site, www.spacedev.com. The replay will be available for 90 days.

For more information regarding the Company, please review the Company’s filings on the SEC EDGAR system at www.sec.gov or at www.spacedev.com.

Click here to download this entire Press Release in PDF format which includes all the financial tables.

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