Astrotech Corporation (NASDAQ:ASTC)

Third Quarter 2012 Results

The Company posted a third quarter fiscal year 2012 net income of $1.0 million, or $0.05 per diluted share on revenue of $10.0 million compared with a third quarter fiscal year 2011 net loss of $0.4 million, or $(0.02) per diluted share on revenue of $5.7 million.

"We are excited to report the positive financial results of the third quarter, driven by our core satellite payload processing business," said Thomas B. Pickens III, Chairman and CEO of Astrotech Corporation. "ASO continued to meet our customer's needs for payload processing while completing over $5.6 million of work on multiple GSE fabrication contracts."

"Additionally, we are pleased about the introduction of our mini mass spectrometer, the MMS-1000™, at PITTCON, the world's largest annual conference and exposition for laboratory science. The MMS-1000™ represents a technological breakthrough due to its size and lab quality performance and has been very well received already resulting in a unit sale and in leases to the laboratory and OEM markets. We will continue to expand our product offering by specifically tuning our instrument and directing our sales force towards established and new markets that can benefit from a more affordable, faster, smaller instrument for the research, security, mobile, and in-situ factory applications."

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 $34.8 million at March 31, 2012 vs $24.5 at March 31, 2011. The majority 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.

In addition to providing support for missions in process at our facilities in Florida, ASO supported the successful launch of the U.S. Navy's Mobile User Objective System (MUOS-1) and the U.S. Air Force's Wideband Global Satcom (WGS-4).

Our Spacetech business unit introduced the MMS-1000™ to market in March 2012, the first commercial product offering of the miniature mass spectrometer initially designed for the sophisticated laboratory professional. The MMS-1000™ is a compact, high performance instrument capable of rapid MS / MS detection of trace levels of volatile compounds in approximately five seconds. The MMS-1000™ provides a versatile platform that can be used in various applications in the security and industrial markets.

Financial Position and Liquidity

Working capital was $7.4 million as of March 31, 2012, which included $15.8 million in cash and cash equivalents and $1.7 million of accounts receivable.

GeoSpecial Astrotech Corp shares are very active today.  The stock has traded over 500k shares thus far today compared to a ten day average of 63K shares.  The GeoTeam® is speculating and hoping that some type of merger deal is in the works.  For more details, please see research note on November 24, 2009 . Please note this is only conjecture!!

Excerpt From GeoBargain & GeoSpecial Review article, November 17, 2009.

Astrotech Corp (NASDAQ:ASTC) Closing Price Nov. 16, 2009: $1.75

• Added to the GeoSpecial List on Oct. 29, 2009 at $2.18.
• Reached a high of $2.49 on Nov. 11, 2009, an increase of 14% since placement on the list.

We actually took note of Astrotech on May 13, 2009, but passed on it based on our view that its impressive third quarter results could be an aberration. Well, on September 28, 2009 the Company reported strong fourth quarter results as well, albeit down sequentially from the third quarter. See release.

Astrotech also just reported first quarter results, which although up compared to last year’s quarter, was significantly down on a sequential basis. Although quarterly fluctuations remains an issue with Astrotech, the Company still seems optimistic about the future, giving us reason to continue tracking its story.

We are hoping a strong year end backlog of $25.4 million will bode well for 2010. The Company has indicated that it expects to fill $21.4 million of this backlog in 2010. Using last year as a guide, Astrotech began its 2009 fiscal year with an expected backlog of $18 million and ended up reporting sales of around $32 million. (Please note that this trend has not always existed).

A major concern of ours is the Company’s heavy reliance on space shuttle launches. To address this, it seems that Astrotech is taking initiatives to diversify the applications of its technology. Furthermore, the Company has engaged the investment banking firm Lazard Ltd. for advisement in exploring strategic financial and business alternatives to enhance shareholder value.

“The range of alternatives which may be considered could include strategic acquisitions, a sale of some or all of the Company’s assets or a variety of other possible transactions.”

With a book value of $2.28, investors may look at ASTC as low risk play, especially now that it is exploring strategic alternatives.

Astrotech Corp recently filed its 2009 Third Quarter Report. Recall that the  GeoTeam® commented on the company's 2009 Third quarter press release on May 13 2009.  We were hoping that the SEC quarterly filing would give some insight into whether the quarter's performance was a one time event or a repeatable situation, as the company has had a sporadic EPS history. Part of the company's revenues are derived from contract work related to Space Shuttle launches. According to the 10Q the company had an increase of $6.7 million due to seven shuttle missions being processed vs. two last year.  Unfortunately, not much more future insight into this issue was provided.  The GeoTeam® will have more information if warranted, but it appears that this quarter may not be the norm.  The fourth quarter will offer more insight.

The GeoTeam® is taking a closer look at Astrotech Corp. ($1.47) due to an impressive third quarter report released earlier today. This looks like the company's first profitable quarter in several years, so we are not sure if this is a one time event or if it will be recurring.   The GeoTeam® will have more information if warranted.   Established a small position, but caution is needed.