• GAAP results: net income of $1.3 million (attributable to Astrotech Corporation), on revenue of $6.7 million, or $0.06 per diluted share for the quarter ended September 30, 2013
• EBITDA of $1.6 million for the quarter ended September 30, 2013
• Astrotech Space Operations ("ASO"), the Company's core business, supported four missions which launched in the first quarter of 2014: Advanced Extremely High Frequency -- 3 (AEHF-3), Mobile User Objective System -- 2 (MUOS-2), Wideband Global SATCOM -- 6 (WGS-6), and a classified mission.
AUSTIN, Texas, Nov. 14, 2013 (GLOBE NEWSWIRE) -- Astrotech Corporation (ASTC), a leading provider of commercial aerospace services, today announced financial results for its fiscal year 2014 first quarter ended September 30, 2013.
"Our core satellite processing business, Astrotech Space Operations, performed well this quarter as we benefited from a relatively active launch schedule. We continue to deliver on our commitments to our customers and are very pleased with the performance of our team as we finalize the design and fabrication of the GSE project," said Thomas B. Pickens III, Chairman and CEO of Astrotech. "While our 18-month rolling backlog reflects the final stages in the completion the GSE project, we remain committed to serving our valued customers in delivering the best satellite processing services in the industry."
First Quarter Results
The Company posted a first quarter fiscal year 2014 net income of $1.3 million, or $0.06 per diluted share on revenue of $6.7 million compared with a first quarter fiscal year 2013 net loss of $1.4 million, or $(0.07) per diluted share on revenue of $6.1 million.
Update of Ongoing Operations
The Company's 18-month rolling backlog, which includes contractual backlog, scheduled but uncommitted missions, and the design and fabrication of GSE, was $23.2 million at September 30, 2013. The majority of the revenue at ASO consists of pre-launch satellite processing services, which include hardware launch preparation, advance planning, use of unique satellite preparation facilities and spacecraft checkout, encapsulation, fueling, and transport and design and fabrication of equipment and hardware for space launch activities at our Titusville, Florida and VAFB locations.
Financial Position and Liquidity
Working capital was $6.5 million as of September 30, 2013, which included $4.4 million in cash and cash equivalents and $6.4 million of accounts receivable.
About Astrotech Corporation
Astrotech is one of the first space commerce companies and remains a strong entrepreneurial force in the aerospace industry. We are leaders in identifying, developing and marketing space technology for commercial use. Our ASO business unit serves our government and commercial satellite and spacecraft customers with pre-launch services on the eastern and western range. 1st Detect Corporation is developing what we believe is a breakthrough miniature mass spectrometer, the MMS-1000(TM), while Astrogenetix, Inc. is a biotechnology company utilizing microgravity as a research platform for drug discovery and development.
Aware (AWRE) is a small technology company with a market cap just over $100 million. The company offers software and services that focus on biometrics, which is the identification of humans by their unique characteristics, such as fingerprints or the iris of a person's eye. Aware has contracted with customers ranging from the healthcare industry to law enforcement, and even the FBI.
It offers products that assist in gathering and processing biometric data to deliver solutions in areas such as electronic passports and border security. It offers products as diverse as web based biometric analysis to fingerprint matching mobile apps. In addition, it also supports biometric integration into background checks, identification cards and medical imaging. The company has also had legacy business operations in areas as varied as DSL (Digital Subscriber Line) monitoring software to image compression and storage.
In fact, Aware has shown a drop in annual revenue because it discontinued its DSL Service Assurance business line. Management was willing to take a one time hit to focus on its faster growing biometrics divisions. This appears to be a sound decision, as DSL had been steadily declining anyway and negatively impacting earnings. Freed from this drag, Aware's biometrics division has grown revenue 44% and 35% for the last 3 and 6 months, respectively, compared to the same periods last year.
While revenue declined somewhat from the first quarter this year, according to the latest quarterly report this was "primarily due to the timing of the receipt of customer orders." This lumpiness should even out over the remainder of the year and is expected to continue to show strong year over year gains, especially as the company transitions to a more biometric focused business model.
Fueled by this focus on the faster growing segment, total revenue should begin to grow again and should easily top $20 million this year even as the legacy DSL revenue declines to zero, even if the biometrics division can continue to grow revenue at just the 20% annual growth rate it has averaged the past several years. This could be accelerated by the higher year over year growth rates the company has achieved since the renewed focus on biometrics, as evidenced by the recent biometrics growth rate closer to double this compared to last year.
Aware has a very strong balance sheet, with over $75 million in cash, mostly resulting from the 2012 sale of patents for $71.2 million. This works out to $3.15/share of net cash, even after subtracting the company's liabilities, or over 60% of the company's current stock price. Since the company only monetized patents related to wireless technology and its shuttered DSL business, Aware continues to hold a vast portfolio of patents related to biometrics, whose value is not currently reflected on the balance sheet.
According to the most recent annual report, "As of December 31, 2012, we had approximately 103 U.S. and foreign patents, and approximately 88 pending patent applications pertaining to communications and signal processing technologies, including DSL service assurance, biometrics imaging and medical imaging compression." A search of Google patents also shows some additional biometric patents that have been granted since then.
With the release of Apple's (AAPL) latest iPhone with its much ballyhooed fingerprint scanner, the arena of biometrics should begin to garter more investor attention, especially since the origin of that technology was through Apple's own purchase of another small biometrics company, AuthenTec. Apple acquired AuthenTec in 2012 for $356 million, or about 4.4 times its estimated annual 2012 revenues of $81 million. According to the SEC filing, Apple also had to shell out an additional $115 million for the rest of AuthenTec's patents. Aware currently trades at a slightly higher price/sales ratio of above 5 and holds about half as many patents, but is much more profitable and again also holds $75 million in cash. Combined with the inferred value of its patents, Aware might be expected to bring a price of at least twice its current market cap in a similar deal.
While a competitor to Apple could be enticed by Aware's cash position and patent portfolios and offer a buyout at a premium, I would rather see the company continue to execute their focus on biometrics as this area becomes more mainstream. Patient shareholders should reap the rewards of this innovative company for years to come. I view Aware as fairly low risk due to its strong cash position and valuable patent portfolio, with tremendous upside exposure to the burgeoning field of biometrics. I strongly recommend investors consider accumulating shares around the recent $5 price, as I have recently done, before the rest of the market catches on and rightly sends the shares higher.