ASTC Astrotech Corporation

Astrotech Corporation (NASDAQ: ASTC) reported its financial results for the second quarter of fiscal year 2016 as of December 31, 2015.

“During the second quarter of fiscal year 2016, our technologies garnered additional validation,” said Thomas B. Pickens III, Chairman and CEO of Astrotech Corporation. “1st Detect is meeting and exceeding milestones related to the next generation chemical detector (NGCD) program. The engineering team remains focused on satisfying application specific chemical detection objectives for customers and development partners.”

Astral Color ICE™ technology was selected by a worldwide technology leader in the media and entertainment sector to perform film restoration. “We are excited about the engagement and the market opportunity,” said Rajesh Mellacheruvu, COO of Astrotech Corporation. “As the demand for ultra-high definition, high-dynamic range 4K resolution format increases, we expect to expand Astral’s use among digital media and entertainment post-production houses and studios.”

Second Quarter Fiscal Year 2016 Financial Highlights

Revenue, costs of goods sold, SG&A, and R&D are expected to continue to fluctuate based on the timing of contract revenue and the continued transition from a research company to an operating company.

• Revenue was $927 thousand, reflecting 1st Detect’s income from research-based, fixed-price, government-related subcontracts of $685 thousand and from the manufacturing sales of space-grade handrails, a legacy business, of $242 thousand.
• Gross profit was $295 thousand, or 32%, which reflects the benefit from the higher margin handrail sales.
• Loss from continuing operations before income taxes was $2.6 million, compared to $3.0 million in the second quarter of fiscal year 2015. This decrease is the result of the aforementioned revenue.
• Astrotech held $32.2 million in cash, investments, and an indemnity receivable at the quarter close. Management continues to expect to receive the full indemnity receivable of $6.1 million by the end of February 2016, and, as of February 8, was not aware of any claims against this receivable.
• Astrotech Corporation had no debt at December 31, 2015.
• The Board extended the share repurchase plan of up to $5 million of the Company’s outstanding common stock through December 31, 2016.

Technology Highlights

• 1st Detect received three U.S. patents during the second quarter. The total at January 31, 2016 reached 14 U.S. and nine international issued and 10 U.S. and 16 international pending.
• 1st Detect launched its new iONTRAC Process Chemical Analyzer at the Gulf Coast Conference where it contributed five technical programs in October.
• Astral Images signed a contract with a worldwide technology leader in the media and entertainment sector to use Astral Color ICE™ as part of its workflow to restore film.
• Astrogenetix continued its long-term efforts to use the unique power of microgravity to develop a novel vaccine and therapeutic products, and, in conjunction with NASA, continued the pursuit of an investigational new drug application with the Food and Drug Administration for Salmonella.

About Astrotech Corporation

Astrotech Corporation (NASDAQ: ASTC) identifies and commercializes emerging disruptive technologies through its closely held subsidiaries. Management sources investment opportunities from various government laboratories, agencies, universities, and corporations, as well as through its own internal research. Sourced from Oak Ridge Laboratory’s chemical analyzer research, 1st Detect develops, manufactures, and sells chemical analyzers that streamline processes for industrial use in the airport security, food and beverage, semiconductor, pharmaceutical, research and environmental markets, and the military. Sourced from decades of image research from the laboratories of IBM and Kodak combined with classified satellite technology from government laboratories, Astral Images sells film to digital image enhancement, defect removal and color correction software, and post processing services providing economically feasible conversion of television and feature 35mm and 16mm films to the new 4K ultra-high definition (UHD), high-dynamic range (HDR) format necessary for the new generation of digital distribution. Sourced from NASA’s extensive microgravity research, Astrogenetix is applying a fast-track on-orbit discovery platform using the International Space Station to develop vaccines and other therapeutics. Demonstrating its entrepreneurial strategy, Astrotech management sold its state-of-the-art satellite servicing operations to Lockheed Martin in August 2014. Astrotech has operations throughout Texas and is headquartered in Austin. For information, please visit www.astrotechcorp.com.

This press release contains forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, whether we can successfully develop our proprietary technologies and whether the market will accept our products and services, as well as other risk factors and business considerations described in the Company’s Securities and Exchange Commission filings including the annual report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements.

   

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share data)

(Unaudited)

  Three Months Ended December 31, Six Months Ended December 31, 2015   2014 2015   2014 Revenue $ 927 $ 4 $ 927 $ 324 Cost of revenue 632   4   632   281   Gross profit 295   —   295   43   Operating expenses: Selling, general and administrative 1,671 2,012 3,957 3,972 Research and development 1,326   984   2,590   1,676   Total operating expenses 2,997   2,996   6,547   5,648   Loss from operations (2,702 ) (2,996 ) (6,252 ) (5,605 ) Interest and other expense, net 94   24   193   36   Loss from continuing operations before income taxes (2,608 ) (2,972 ) (6,059 ) (5,569 ) Income tax benefit (expense) —   734   (2 ) 2,059   Loss from continuing operations (2,608 ) (2,238 ) (6,061 ) (3,510 ) Discontinued operations Income from discontinued operations — — — 1,303 Income tax expense — (184 ) — (2,562 ) Gain on sale of discontinued operations —   —   —   25,630   (Loss) income from discontinued operations —   (184 ) —   24,371   Net (loss) income (2,608 ) (2,422 ) (6,061 ) 20,861 Less: Net loss attributable to noncontrolling interest (82 ) —   (171 ) —   Net (loss) income attributable to Astrotech Corporation (2,526 ) (2,422 ) (5,890 ) 20,861 Less: Deemed dividend to State of Texas —   —   —   531   Net (loss) income attributable to common stockholders $ (2,526 ) $ (2,422 ) $ (5,890 ) $ 20,330     Amounts attributable to Astrotech Corporation: Loss from continuing operations, net of tax $ (2,526 ) $ (2,238 ) $ (5,890 ) $ (3,510 ) (Loss) income from discontinued operations, net of tax —   (184 ) —   24,371   Net (loss) income attributable to Astrotech Corporation $ (2,526 ) $ (2,422 ) $ (5,890 ) $ 20,861     Weighted average common shares outstanding: Basic and diluted 20,701 19,637 20,703 19,593   Basic and diluted net (loss) income per common share: Net loss attributable to Astrotech Corporation from continuing operations $ (0.12 ) $ (0.11 ) $ (0.28 ) $ (0.20 ) Net (loss) income from discontinued operations —   (0.01 ) —   1.24   Net (loss) income attributable to Astrotech Corporation $ (0.12 ) $ (0.12 ) $ (0.28 ) $ 1.04     Other comprehensive (loss) income, net of tax: Available-for-sale securities: Net unrealized loss, net of tax benefit of $40, $0, $73, and $0 $ (74 ) $ — $ (135 ) $ — Reclassification adjustment for realized losses included in net (loss) income, net of taxes of $2, $0, $5, and $0 5   —   9   —   Total comprehensive (loss) income $ (2,595 ) $ (2,422 ) $ (6,016 ) $ 20,861      

ASTROTECH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

    December 31, 2015 June 30, 2015   Assets Current assets Cash and cash equivalents $ 2,145 $ 2,330 Short-term investments 18,192 23,161 Accounts receivable, net of allowance 143 198 Inventory 1,232 509 Indemnity receivable 6,100 6,100 Prepaid expenses and other current assets 475   296   Total current assets 28,287 32,594 Property and equipment, net 3,572 3,108 Long-term investments 5,768   8,516   Total assets $ 37,627   $ 44,218     Liabilities and stockholders’ equity Current liabilities Accounts payable $ 409 $ 398 Accrued liabilities and other 1,483 1,801 Income tax payable —   190   Total current liabilities 1,892 2,389 Other liabilities 130   101   Total liabilities 2,022   2,490     Commitments and contingencies   Stockholders’ equity Preferred stock, no par value, convertible, 2,500,000 shares authorized; no shares issued and outstanding, at December 31, 2015 and June 30, 2015 — — Common stock, no par value, 75,000,000 shares authorized; 21,864,548 shares issued at December 31, 2015 and June 30, 2015, respectively; 20,700,673 and 20,743,973 shares outstanding at December 31, 2015 and June 30, 2015, respectively 189,185 189,007 Treasury stock, 1,163,875 and 1,120,575 shares at cost at December 31, 2015 and June 30, 2015, respectively (2,789 ) (2,672 ) Additional paid-in capital 1,210 1,139 Accumulated deficit (151,912 ) (146,022 ) Accumulated other comprehensive loss (217 ) (23 ) Equity attributable to stockholders of Astrotech Corporation 35,477 41,429 Noncontrolling interest 128   299   Total stockholders’ equity 35,605   41,728   Total liabilities and stockholders’ equity $ 37,627   $ 44,218  

View source version on businesswire.com: http://www.businesswire.com/news/home/20160209005554/en/

Company ContactAstrotech CorporationEric Stober, 512-485-9530Chief Financial OfficerorInvestor Relations ContactLHACathy Mattison and Kirsten Chapman, 415-433-3777ir@astrotechcorp.com