SpaceDev, Inc. has reported its financial results for the fourth quarter and year ending December 31, 2004.
For the year ending December 31, 2004, revenue increased approximately 65% to $4,890,743, compared to $2,956,322 for the same period in 2003 primarily due to contracts with the Missile Defense Agency, the Air Force Research Laboratory and our work on SpaceShipOne for Scaled Composites, which created new revenue and follow-on opportunities.
Revenue for the fourth quarter of 2004 was $1,445,174 compared to $901,746 for the same three-month period in 2003. This represented an increase of approximately 60% and was primarily due to the October 1st “kick-off” of task order two for the Missile Defense Agency contract.
“2004 was an exciting year of technological successes, operational progress and continued financial improvement at SpaceDev. We completed the first task order on our Missile Defense Agency contract and began the second task order. We completed work on two small business innovation research projects with the Air Force as well as secured follow on work for both. We powered SpaceShipOne into the history books with our hybrid rocket motor technology and helped to create the first private sector astronauts. We also continued work on our small launch vehicle program with the Air Force, while experiencing a profit from operations and improving stockholder value from a deficit to approximately a $4.0 million in equity," said Jim Benson, SpaceDev’s founding chairman and chief executive officer. “We were very busy in 2004 and are carrying that momentum into 2005. We are continuing to bid new projects as well as work diligently on all of our current programs.”
Profit from operations was $144,285 for the year ending December 31, 2004, compared to a loss from operations of $890,092 for the same period in 2003. Profit from operations for the three-months ending December 31, 2004 was $55,075 compared to a loss of $11,711 for the comparable period in 2003.
During the year ending December 31, 2004, EBITDA increased to $227,815, or 4.7% of net sales, compared to an EBITDA loss of $723,119, or 24.5% of net sales, for the same period in 2003. EBITDA is defined as non-GAAP earnings before net interest income (expense), taxes, depreciation and amortization.
The net loss for the year-end December 31, 2004 was $3,027,054, or $0.16 per share, compared to a net loss of $1,246,067, or $0.08 per share, for the comparable period in 2003. The net losses were primarily due to non-cash interest expense, which was $3,254,430 for the year ending December 31, 2004 compared to $257,882 for the same period in 2003. These non-cash fees were related to the Company’s revolving credit facility with the Laurus Master Fund. Non-cash interest expense is not included in the calculation of profit from operations. The Company is working to eliminate its non-cash charges from financing activities in 2005 and beyond. The Company may continue to issue stock and stock-based compensation to employees and others, which may result in non-cash charges as required under FAS 123R.
“Although our overall net loss increased year-over-year, we have had four consecutive quarters of profit from operations and five consecutive quarters of positive EBITDA,” said Richard B. Slansky, president and chief financial officer of SpaceDev. “We knew we would continue to have the non-cash interest expense in 2004, but do not expect it to continue into 2005.”
Net cash used in operating activities totaled approximately $110,000 for the year ending December 31, 2004, a decrease of approximately $925,000 as compared to approximately $1,035,000 used in operating activities during the same period in 2003. The improvement in cash position was mainly due to our improved operating performance, an increase in accounts receivable from new and existing contracts and a reduction in work-in-process due to the shift from fixed price contracts to cost plus fixed fee contracts, as well as a few other small improvements.
Net cash increased to $5,068,601 at December 31, 2004, an increase of $4,476,595 from $592,006 at December 31, 2003. The increase in net cash is primarily due to the Company’s recent preferred stock financing agreement, conversions under the Company’s revolving credit facility, exercises of warrants issued under previous financings, exercises of stock options under the Company’s 1999 Stock Option Plan and profit from operations. The working capital ratio increased to 7.19 in the year from 0.59 in the same period last year. Furthermore, the financing combined with the conversions and exercises resulted in a positive stockholders’ equity of $4,335,657 at December 31, 2004 from a deficit of $2,072,628 at December 31, 2003.
“During 2003 and 2004, we focused our attention on strengthening our balance sheet, mainly to solidify our financial position and present a stronger, more viable company to our customers and prospective customers. We used a combination of tools to improve our stockholders’ equity and cash balances, including our revolving credit facility and a preferred stock offering with the Laurus Funds,” said Slansky. “In addition to strengthening our balance sheet in 2004, we achieved our eighth consecutive quarter of revenue growth and fourth consecutive quarter of operating income. In 2005, we plan to focus on improving the income statement, with particular emphasis on growing our sales by executing on existing contracts, while generating new business for the future.”