SOURCE: SpaceDev, Inc.

November 14, 2006 06:00 ET

SpaceDev Reports Third Quarter Fiscal 2006 Results

Third Quarter Revenue Increases by Over 200%; Twelfth Consecutive Quarter of Positive EBITDA

POWAY, CA -- (MARKET WIRE) -- November 14, 2006 -- SpaceDev, Inc. (OTCBB: SPDV) has reported the financial results for its third quarter ended September 30, 2006. The Company reported over $7.0 million in revenues for the quarter, or an increase of over 213%, compared to revenue of $2.2 million during the same three month period last year. For the nine months ended September 30, 2006, the Company reported revenues of $22.8 million, or an increase of over 383%, compared with revenues of $5.9 million for the same nine month period last year.

The Company also reported net income of approximately $21,000 and positive EBITDA of over $230,000 for the third quarter of 2006 and net income of $65,000 and a positive EBITDA of $682,000 for the nine months ended September 30, 2006. Net income in 2006 includes expense of approximately $101,000 under the newly applicable SFAS No. 123(R) stock option expense for the nine month period. (See below for more information about EBITDA, a non-GAAP financial measure defined as earnings before net interest income (expense), taxes, depreciation and amortization; "amortization" includes SFAS No. 123(R) stock option expense.)

"SpaceDev executed on some important contracts this quarter and we continued our efforts to expand our private sector space program," said Mark N. Sirangelo, SpaceDev Chairman and Chief Executive Officer. "I am extremely proud of our Poway, Boulder and Durham teams and what we are accomplishing. Our financial progress has continued, even with significant investments in our new business development efforts. We are committed to building a solid infrastructure and a platform for future growth and opportunity."

During the quarter the Company signed several new contracts including a $6.3 million contract for subsystems on NASA's Lunar Reconnaissance Orbiter and an expansion of its MDA program, under which SpaceDev will begin manufacturing microsatellites for the Missile Defense Agency and for which the Company expects to receive a multi-million dollar task order under the existing contract. Overall, revenue increased primarily due to the Company's first-quarter acquisition of Starsys Research Corporation, as well as the continuing work on its existing government contracts.

"During the quarter, we began a thorough evaluation of our operations, seeking to increase efficiency and reduce costs," said Richard B. Slansky, SpaceDev President and Chief Financial Officer. "We have created a corporate business management team to further this effort, which I lead. Our focus for the third quarter of 2006 was on proposal preparation, execution on customer contracts and efforts to increase profits and maximize our return to shareholders."

Net income for the three and nine months ended September 30, 2006 was approximately $21,000, or ($0.00) per share, and approximately $65,000, or ($0.01) per share, respectively, compared to approximately $136,000, or $0.00 per share, and approximately $348,000, or $0.01 per share, for the comparable periods in 2005. Although net income per share remained relatively stable on a sequential-quarters basis, there was a decrease in net income on a year-over-year basis, primarily attributable to bidding a number of proposals during the first nine-months of 2006, cost overruns on certain Starsys contracts (mainly entered into pre-2006), stock option expense of $101,000 for the nine months ended September 30, 2006, which is now required under SFAS 123(R), and absorbing transition expenses related to combining marketing and sales and general and administrative organizations as part of the merger with Starsys. Although the Company had net income in the three-month and nine-month periods ended September 30, 2006, its earnings-per-share figures for those periods were negative. This was due to preferred stock dividend requirements for those periods. The Company cautions investors that comparisons of 2006 to 2005 periods are of limited usefulness, due to the scale of the Starsys acquisition.

Cash used in operating activities during the first nine months of 2006 was approximately $1.3 million, compared to cash provided by operating activities of approximately $313,000 during the same period in 2005. This was primarily due to post-acquisition funding requirements of Starsys payables and other related working capital needs.

Third Quarter Conference Call Details

SpaceDev will host a conference call Wednesday, November 15, 2006, at 11:00 a.m. EST to discuss the quarter results. All those interested in hearing management's discussion are invited to join the call by dialing (888) 694-4767. International participants may access the call by dialing (973) 582-2751. Participants may also access a live Web cast of the conference call through the Investor Relations section of SpaceDev's Web site at www.spacedev.com. A replay of the Web cast will be available for seven days.

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

Non-GAAP Financial Measures

For the nine months ending                 September 30,    September 30,
                                               2006             2005
                                            (Unaudited)      (Unaudited)
                                          --------------   --------------
Net Income                                $       64,678   $      348,143
                                          --------------   --------------

Interest Income                                  (43,466)         (69,631)
Interest Expense                                  18,471            2,282
Non-Cash Interest Expense                          1,918           28,875
Gain on Building Sale                            (87,956)         (87,954)
Stock Option Expense                             101,142                0
Provision for income taxes                        14,290            1,200
Depreciation and Amortization                    613,166          108,271
                                          --------------   --------------
EBITDA *                                  $      682,243   $      331,457
                                          ==============   ==============

For the three months ending                September 30,    September 30,
                                               2006             2005
                                            (Unaudited)      (Unaudited)
                                          --------------   --------------
Net Income                                $       21,457   $      136,251
                                          --------------   --------------

Interest Income                                   (2,714)         (24,848)
Interest Expense                                   7,842              452
Non-Cash Interest Expense                          1,918                -
Gain on Building Sale                            (29,319)         (29,318)
Stock Option Expense                             (14,551)
Provision for income taxes                         5,055              400
Depreciation and Amortization                    240,666           44,078
                                          --------------   --------------
EBITDA *                                  $      230,354   $      127,015
                                          ==============   ==============
* This release contains disclosure of EBITDA, which is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The definition of EBITDA used to calculate the EBITDA figures presented herein, while considered to be a common definition used by investors and financial analysts, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA provides an important additional perspective on its operating results, its ability to service its long-term obligations, its ability to fund continuing growth, and its ability to continue as a going concern. The Company's management regularly evaluates its progress based on EBITDA. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP, such as net income or loss (as an indicator of operating performance) or cash flow (as a measure of liquidity).

About SpaceDev

SpaceDev, Inc. is a space technology/aerospace company that creates and sells affordable and innovative space products and mission solutions. For more information, visit www.spacedev.com and www.starsys.com.

Except for factual statements made herein about past events, this news release consists of forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words such as "believe," "intends," "expects," "plans," "anticipates" and variations thereof, identify forward-looking statements, although their absence does not mean that a statement is not forward looking. Forward-looking statements are based on the Company's current expectations, and are not guarantees of performance. The Company's actual results could differ materially from its current expectations. Factors that could contribute to such differences include risks and uncertainties associated with: the Company's ability to effectively integrate acquisitions; rescheduling or cancellation of customer orders; uncertainties in the government budgeting and contracting process; ability to control costs and expenses; and, the possible need for additional financing. Reference is also made to other factors described in the Company's periodic reports filed with the SEC, including the Company's most current Annual Report on Form 10-KSB and subsequent Quarterly Reports on Form 10-QSB. These forward-looking statements speak only as of the date of this release. SpaceDev does not intend to update these forward-looking statements.

                      SpaceDev, Inc. and Subsidiaries
                        Consolidated Balance Sheets
                                 Unaudited

At September 30,                                    2006          2005
                                                -----------    -----------

  Assets

 Current Assets
    Cash                                        $ 3,693,612    $ 4,022,243
    Accounts receivable                           6,028,819      1,096,645
    Inventory                                     3,528,229         10,412
          Raw materials                             273,559              -
          WIP:  costs in excess of billings       3,254,670         10,412
          Finished goods                                  -              -
    Note receivable                                       -      1,326,453
    Other current assets                            965,433              -
                                                -----------    -----------

 Total Current Assets                            14,216,093      6,455,753

 Fixed Assets - Net                               3,712,149        822,980

 Goodwill                                        12,246,362              -

 Other Assets                                       323,063         64,469
                                                -----------    -----------

 Total Assets                                   $30,497,667    $ 7,343,202
                                                -----------    -----------


 Liabilities and Stockholders' Equity

 Current Liabilities
    Accounts payable and accrued expenses      $  2,439,832   $    419,719
    Accrued payroll, vacation
     and related taxes                            1,421,800        350,145
    Billings in excess of costs incurred          3,879,981              -
    Revolving credit facility                     1,926,853
    Other accrued liabilities                     1,503,919        304,897
                                               ------------   ------------

 Total Current Liabilities                       11,172,385      1,074,761

 Capitalized Lease Obligations, Less Current
  Maturities                                        168,129              -

 Deferred Gain - Assets Held For Sale               742,723        859,996

 Other Long Term Liabilities                         15,266              -

                                               ------------   ------------

 Total Liabilities                               12,098,503      1,934,757

 Commitments and Contingencies

 Stockholders' Equity
    Convertible preferred stock, $.001 par
     value, 10,000,000 shares authorized,
     and 253,249 and 248,460 shares issued
     or outstanding, respectively
    Series C Convertible preferred stock                248            248
    Series D-1 Convertible preferred stock                5              -
    Common stock, $.0001 par value;
     100,000,000 and 50,000,000 shares
     authorized, and 29,485,036 and
     22,319,156 shares issued and
     outstanding, respectively                        2,948          2,231
    Additional paid-in capital                   33,365,995     20,091,408
    Accumulated deficit                         (14,970,032)   (14,685,442)
                                               ------------   ------------
 Total Stockholders' Equity                      18,399,164      5,408,445
                                               ------------   ------------

 Total Liabilities and Stockholders' Equity    $ 30,497,667   $  7,343,202
                                               ============   ============

Please reference the Company's Form 10-QSB to access the notes which are
an integral part of the consolidated financial statements.


                       SpaceDev, Inc. and Subsidiaries
                   Consolidated Statements of Operations
                                  Unaudited



                                         Three Months Ended
 At September 30,             2006          %          2005          %
                          ------------  ---------  ------------  ---------

 Net Sales                $  7,006,347      100.0% $  2,234,010      100.0%
 Total Cost of Sales*        5,123,878       73.1%    1,709,077       76.5%
                          ------------  ---------  ------------  ---------

 Gross Margin                1,882,469       26.9%      524,933       23.5%
                          ------------  ---------  ------------  ---------
 Operating Expenses

  Marketing and sales          524,701        7.5%      188,655        8.4%
  Research and
   development                  70,754        1.0%          446        0.0%
  General and
   administrative            1,282,775       18.3%      252,895       11.3%
                          ------------  ---------  ------------  ---------
 Total Operating
  Expenses*                  1,878,230       26.8%      441,996       19.8%
                          ------------  ---------  ------------  ---------
 Income/(Loss) from
  Operations                     4,239        0.1%       82,937        3.7%
                          ------------  ---------  ------------  ---------
 Non-Operating
  Income/(Expense)
  Interest income                2,714        0.0%       24,848        1.1%
  Interest expense              (7,842)      -0.1%         (452)       0.0%
  Gain on building sale         29,319        0.4%       29,318        1.3%
  Non-Cash loan fee             (1,918)       0.0%            -        0.0%
                          ------------  ---------  ------------  ---------

 Total Non-Operating
  Income                        22,273        0.3%       53,714        2.4%
                          ------------  ---------  ------------  ---------
 Income Before Taxes            26,512        0.4%      136,651        6.1%
 Income tax provision            5,055        0.1%          400        0.0%
                          ------------  ---------  ------------  ---------
 Net Income               $     21,457        0.3% $    136,251        6.1%
                          ============  =========  ============  =========
 Net Income                     21,457                  136,251
      Less Preferred
       Dividend Payments      (150,842)                 (42,737)
     Adjusted Net Income
      (Loss) for EPS
      Calculation             (129,385)                  93,514
 Net Income Per Share:    $      (0.00)            $       0.00
                          ------------  ---------  ------------  ---------
  Weighted-Average Shares
   Outstanding              29,027,350               21,241,448
 Fully Diluted Net Income
  Per Share:              $      (0.00)            $       0.00
                          ------------  ---------  ------------  ---------
  Fully Diluted
   Weighted-Average
   Shares Outstanding       29,027,350               23,831,994
                          ============  =========  ============  =========

* The following table shows how the Company's stock option expense would
   be allocated to all expenses.

  Cost of sales           $     10,287             $          -
  Marketing and sales              717                        -
  Research and
   development                       -                        -
  General and
   administrative              (25,555)                       -
                          ------------  ---------  ------------  ---------
                          $    (14,551)            $          -
                          ============  =========  ============  =========



                                          Nine Months Ended
 At September 30,             2006          %          2005          %
                          ------------  ---------  ------------  ---------

 Net Sales                $ 22,812,290      100.0% $  5,942,558      100.0%
 Total Cost of Sales*       16,718,917       73.3%    4,571,505       76.9%
                          ------------  ---------  ------------  ---------

 Gross Margin                6,093,373       26.7%    1,371,053       23.1%
                          ------------  ---------  ------------  ---------
 Operating Expenses

  Marketing and sales        1,859,396        8.2%      493,344        8.3%
  Research and
   development                 275,592        1.2%        9,558        0.2%
  General and
   administrative            3,990,450       17.5%      644,966       10.9%
                          ------------  ---------  ------------  ---------
 Total Operating
  Expenses*                  6,125,438       26.9%    1,147,868       19.3%
                          ------------  ---------  ------------  ---------
 Income/(Loss) from
  Operations                   (32,065)      -0.1%      223,185        3.8%
                          ------------  ---------  ------------  ---------
 Non-Operating
  Income/(Expense)
  Interest income               43,466        0.2%       69,632        1.2%
  Interest expense             (18,471)      -0.1%       (2,283)       0.0%
  Gain on building sale         87,956        0.4%       87,953        1.5%
  Non-Cash loan fee             (1,918)       0.0%      (28,875)      -0.5%
                          ------------  ---------  ------------  ---------

 Total Non-Operating
  Income                       111,033        0.5%      126,427        2.1%
                          ------------  ---------  ------------  ---------
 Income Before Taxes            78,968        0.3%      349,612        5.9%
 Income tax provision           14,290        0.1%        1,200        0.0%
                          ------------  ---------  ------------  ---------
 Net Income               $     64,678        0.3% $    348,412        5.9%
                          ============  =========  ============  =========
 Net Income                     64,678                  348,412
      Less Preferred
       Dividend Payments      (446,791)                (128,210)
     Adjusted Net Income
      (Loss) for EPS
      Calculation             (382,113)                 220,202
 Net Income Per Share:    $      (0.01)            $       0.01
                          ------------  ---------  ------------  ---------
  Weighted-Average Shares
   Outstanding              28,419,751               21,777,211
 Fully Diluted Net Income
  Per Share:              $      (0.01)            $       0.01
                          ------------  ---------  ------------  ---------
  Fully Diluted
   Weighted-Average
   Shares Outstanding       28,419,751               25,230,427
                          ============  =========  ============  =========


* The following table shows how the Company's stock option expense would
   be allocated to all expenses.

  Cost of sales           $     10,287             $          -
  Marketing and sales              717                        -
  Research and
   development                       -                        -
  General and
   administrative               90,138                        -
                          ------------  ---------  ------------  ---------
                          $    101,142             $          -
                          ============  =========  ============  =========

Please reference the Company's Form 10-QSB to access the notes which are
an integral part of the consolidated financial statements.


                    SpaceDev, Inc. and Subsidiaries
       Consolidated Statements of Operations - Supplemental Schedule
                       (Unaudited and Non-GAAP)



                                               Three Months Ended
 At September 30,                        2006       %       2005       %
                                      ----------  -----  ----------  -----

 GAAP Operating Income                $    4,239    0.1% $   82,937    1.4%
  FAS 123(R) stock -based
   compensation                          (14,551)  -0.2%          -    0.0%
                                      ----------  -----  ----------  -----
 Non-GAAP Operating Income/(Loss)        (10,312)  -0.1%     82,937    1.4%
                                      ----------  -----  ----------  -----

 Non-Operating Income/(Expense)
  Interest income                          2,714    0.0%     24,848    0.4%
  Interest expense                        (7,842)   0.0%       (452)   0.0%
  Gain on building sale                   29,319    0.1%     29,318    0.5%
  Non-Cash loan fee                       (1,918)   0.0%          0    0.0%
                                      ----------  -----  ----------  -----
 Total Non-Operating Income               22,273    0.1%     53,714    0.9%
                                      ----------  -----  ----------  -----
 Non-GAAP Net Income Before Taxes     $   11,961    0.1% $  136,651    2.3%
                                      ----------  -----  ----------  -----
 Income tax provision                      5,055    0.0%        400    0.0%
 Non-GAAP Net Income                  $    6,906    0.0% $  136,251    2.3%
                                      ----------  -----  ----------  -----
 Non-GAAP Net Income                       6,906            136,251
      Less Preferred Dividend
       Payments                         (150,842)           (42,737)
     Adjusted Net Income/(Loss) for
      EPS Calculation                   (143,936)            93,514
 Non-GAAP Net Income Per Share        $    (0.00)        $     0.00
                                      ----------  -----  ----------  -----
  Weighted-Average Shares Outstanding 29,027,350         21,241,448
 Fully Diluted Non-GAAP Net Income
  Per Share:                          $    (0.00)        $     0.00
                                      ----------  -----  ----------  -----
  Fully Diluted Weighted-Average
   Shares Outstanding                 29,027,350         23,831,994




                                                Nine Months Ended
 At September 30,                        2006       %       2005       %
                                      ----------  -----  ----------  -----

 GAAP Operating Income                $  (32,065)  -0.1% $  223,185    3.8%
  FAS 123(R) stock -based
   compensation                          101,142    0.4%          -    0.0%
                                      ----------  -----  ----------  -----
 Non-GAAP Operating Income/(Loss)         69,077    0.3%    223,185    3.8%
                                      ----------  -----  ----------  -----

 Non-Operating Income/(Expense)
  Interest income                         43,466    0.2%     69,632    1.2%
  Interest expense                       (18,471)  -0.1%     (2,283)   0.0%
  Gain on building sale                   87,956    0.4%     87,953    1.5%
  Non-Cash loan fee                       (1,918)   0.0%    (28,875)  -0.5%
                                      ----------  -----  ----------  -----
 Total Non-Operating Income              111,033    0.5%    126,427    2.1%
                                      ----------  -----  ----------  -----
 Non-GAAP Net Income Before Taxes     $  180,110    0.8% $  349,612    5.9%
                                      ----------  -----  ----------  -----
 Income tax provision                     14,290    0.1%      1,200    0.0%
 Non-GAAP Net Income                  $  165,820    0.7% $  348,412    5.9%
                                      ----------  -----  ----------  -----
 Non-GAAP Net Income                     165,820            348,412
      Less Preferred Dividend
       Payments                         (446,791)          (128,210)
     Adjusted Net Income/(Loss) for
      EPS Calculation                   (280,971)           220,202
 Non-GAAP Net Income Per Share        $    (0.01)        $     0.01
                                      ----------  -----  ----------  -----
  Weighted-Average Shares Outstanding 28,419,751         21,777,211
 Fully Diluted Non-GAAP Net Income
  Per Share:                          $    (0.01)        $     0.01
                                      ----------  -----  ----------  -----
  Fully Diluted Weighted-Average
   Shares Outstanding                 28,419,751         25,230,427


                   SpaceDev, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows
                             Unaudited


 Nine-Months Ending September 30,                       2006         2005
                                                  -----------  -----------
 Cash Flows From Operating Activities
  Net income                                      $    64,678  $   348,412
  Adjustments to reconcile net income to net cash
   used in operating activities:
   Depreciation and amortization                      613,166      108,265
   Gain on disposal of building sale                  (87,956)     (87,953)
   Stock option expense                               103,317            -
   Non-cash loan fee                                    1,918       28,875
   Change in operating assets and liabilities      (2,014,912)     (84,760)
 Net Cash (Used In) Provided By Operating
  Activities                                       (1,319,788)     312,839
Cash Flows From Investing Activities
  Notes receivable                                          -   (1,326,453)
  Other assets, capitalized acquisition costs      (1,066,564)           -
  Purchases of fixed assets                        (1,163,743)    (651,864)
                                                  -----------  -----------
Net Cash Used in Investing Activities              (2,230,307)  (1,978,317)
 Cash Flows From Financing Activities
  Principal payments on notes payable              (4,675,832)     (27,330)
  Principal payments on capitalized lease
   obligations                                        (20,789)      (2,774)
  Dividend payments on Series C and Series D-1
   Preferred                                         (352,894)           -
  Proceeds from revolving credit facility           1,926,853            -
  Employee stock purchase plan                        122,086       48,343
  Other assets, capitalized revolving credit
   facility costs                                    (175,000)           -
  Proceeds from issuance of preferred stock         4,316,850      600,881
  Proceeds from issuance of common stock              352,395            -
                                                  -----------  -----------
 Net Cash Provided by Financing Activities          1,493,669      619,120
                                                  -----------  -----------
 Net Decrease in Cash                              (2,056,426)  (1,046,358)
                                                  -----------  -----------
 Cash at Beginning of Period                        5,750,038    5,068,601
                                                  -----------  -----------
 Cash at End of Period                            $ 3,693,612  $ 4,022,243
                                                  ===========  ===========

Please reference the Company's Form 10-QSB to access the notes which are
an integral part of the consolidated financial statements.

Contact Information

  • SpaceDev Investor Relations
    Investor Contact:
    Richard Slansky/Jessica Gerstenkorn
    Media Contact:
    Mark Sirangelo
    (858) 375-2026