Astrotech Reports Third Quarter of Fiscal Year 2024 Financial Results

Rhea-AI Summary

Astrotech (Nasdaq: ASTC) announced its Q3 fiscal year 2024 results, ending March 31, 2024. The company reported $34.7 million in cash and liquid investments. Year-to-date revenue reached $1.6 million, driven by sales of the TRACER 1000™ explosive trace detector (ETD) and related maintenance services and consumables. Gross margin improved to 45%, up from 37% the previous year, due to design enhancements and higher sales prices.

1st Detect, a subsidiary, is now accepting orders for the TRACER 1000 Narcotics Trace Detector (NTD). Additionally, the TRACER 1000 is listed under the U.S. General Services Administration (GSA) IT Schedule 70, enabling easier procurement by federal agencies. The company also launched Pro-Control, Inc. to leverage ATI Mass Spectrometer Technology for chemical manufacturing process control.

Astrotech showcased its products at ISC West in Las Vegas. CEO Thomas B. Pickens, III highlighted the expansion of product lines and sales efforts into FY 2025.

Positive

• Astrotech's cash and liquid investments total $34.7 million.
• Year-to-date revenue increased to $1.6 million, driven by TRACER 1000 sales.
• Gross margin improved to 45% from 37% year-over-year.
• 1st Detect is accepting orders for the new TRACER 1000 Narcotics Trace Detector.
• TRACER 1000 listed under the GSA IT Schedule 70, facilitating federal procurement.
• Launch of Pro-Control, Inc. to enhance chemical manufacturing process control.

Negative

• Revenue of $1.6 million is relatively modest.
• The company's profitability and net income are not mentioned, indicating possible financial concerns.
• Continuous reliance on TRACER 1000 sales might indicate a lack of product diversification.

Financial Analyst

Astrotech Corporation's recent third-quarter financial results present a mixed bag for retail investors. Revenue reaching $1.6 million year-to-date shows growth, mainly from the TRACER 1000™ explosive trace detector (ETD) sales. A notable point is the gross margin improvement to 45% from 37% year-over-year. This margin increase reflects effective cost management and price optimization.

Cash reserves of $34.7 million strengthen Astrotech's balance sheet, providing ample liquidity for future investments and operational needs. However, the current revenue figures indicate that the company is still in a growth phase, requiring close monitoring of their ability to sustain and scale sales.

Long-term, the inclusion in the U.S. General Services Administration (GSA) IT Schedule 70 could open significant revenue streams by simplifying the procurement process for federal agencies—a substantial market opportunity. Investors should keep an eye on future quarterly reports to see if these potential revenue channels materialize.

The formation of the new subsidiary, Pro-Control and its exclusive license to use the ATI Mass Spectrometer Technology for chemical manufacturing, diversifies the company's portfolio. However, this also introduces risks associated with entering new markets and the capital expenditures required to establish a foothold.

Market Research Analyst

The introduction of the TRACER 1000 NTD for narcotics detection and its demonstration at the ISC West conference positions Astrotech in an expanding market. The ability to detect trace levels of narcotics in seconds is a significant technical achievement, potentially tapping into high-demand sectors like military, law enforcement and border security.

Yet, the market for narcotics detection is highly competitive, with established players holding significant market share. Astrotech's success will depend on its ability to differentiate its products through superior technology and competitive pricing. The company's claim that mass spectrometry is superior for explosive detection gives it a technological edge, but market penetration will be key.

Investors should consider Astrotech's ramped-up sales and marketing efforts as positive signs of proactive business development. The success at ISC West, a major security trade event, suggests industry recognition and potential leads for future sales. This momentum, if sustained, could lead to increased market share and revenue growth.

AUSTIN, Texas, May 13, 2024 (GLOBE NEWSWIRE) -- Astrotech Corporation (Nasdaq: ASTC) (the “Company” or “Astrotech”) reported its financial results for the third quarter of fiscal year 2024, which ended March 31, 2024.

Financial Highlights & Recent Developments 

• Astrotech’s consolidated balance sheet remains strong with $34.7 million in cash and liquid investments.
• Year-to-date revenue totaled $1.6 million and was generated by sales of TRACER 1000™ explosive trace detector (ETD), as well as recurring maintenance services and sales of consumables for the TRACER 1000. The increase in revenue from the prior fiscal year is primarily the result of new unit sales of the TRACER 1000, fulfilling both of the previously announced purchase orders received.
• Year-to-date gross margin increased to 45% from 37% through the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023. The increase was due to the design improvements resulting in less warranty expense and a comparative increase in sales price.
• Our 1^st Detect subsidiary recently announced that it is currently accepting orders for the TRACER 1000 Narcotics Trace Detector (NTD). The TRACER 1000 NTD is a high-performance laboratory instrument capable of rapid detection of trace levels of narcotic compounds in seconds. The NTD can be applied across various markets including airports, border security, checkpoint, cargo and infrastructure security, correctional facilities, military, and law enforcement.
• The Company announced that 1st Detect’s TRACER 1000 is now listed in the U.S. General Services Administration (GSA) IT Schedule 70 under Contract No. GS-35F-250GA with SRI Group LLC, Special Item Number 334290.  IT Schedule 70 is a long-term contract issued by the GSA to commercial technology vendors that allows sales to the U.S. federal government, one of the largest buyers of goods and services in the world.
• The Company has announced the formation of a wholly owned subsidiary Pro-Control, Inc. (Pro-Control), and has entered into an exclusive license with Pro-Control to use the ATI Mass Spectrometer Technology for chemical manufacturing process control applications. Pro-Control has announced the introduction of its proprietary Pro-Control Maximum Value Processing and the PRO-CONTROL-1000™ mass spectrometer which is designed to test, measure and increase potency, purity and weight yields in the chemical manufacturing processes. The Company is actively marketing the product to large distillers and chemical manufacturers.
• In early April 2024, 1^st Detect showcased its TRACER 1000 NTD and ETD at the International Security Conference and Exposition, also known as ISC West, in Las Vegas, Nevada. We believe ISC West is one of the leading comprehensive security trade events in the U.S. and has some of the country’s leading security and public safety professionals in attendance. 

“We believe mass spectrometry continues to be the best technology for the detection of explosives. We are continually expanding the product line for new applications and market channels. The introduction of the TRACER 1000 NTD, a narcotics detection instrument, is expected to extend our product into more markets including military, law enforcement and security. Also, having the 1^st Detect TRACER 1000 product added to the GSA list will create even more traction for our technology in the U.S. by making it very easy for government entities to purchase our product without the lengthy budget approval needed for most procurement events. We are expanding the sales department and ramping up sales and marketing efforts in the fourth quarter, which should help maintain the momentum built in fiscal year 2024 into fiscal year 2025,” stated Thomas B. Pickens, III, Astrotech’s Chairman, Chief Executive Officer and Chief Technology Officer.

About Astrotech Corporation

Astrotech (Nasdaq: ASTC) is a mass spectrometry company that launches, manages, and commercializes scalable companies based on its innovative core technology through its wholly-owned subsidiaries. 1st Detect develops, manufactures, and sells trace detectors for use in the security and detection market. AgLAB develops and sells chemical analyzers for use in the agriculture market. BreathTech is developing a breath analysis tool to screen for volatile organic compounds that could indicate bodily infections and compromised conditions. Pro-Control is developing the mass spectrometry technology for use in chemical manufacturing processes. Astrotech is headquartered in Austin, Texas. For information, please visit www.astrotechcorp.com.

About the AGLAB 1000™, the BREATHTEST-1000™ and the PRO-CONTROL-1000™

This press release contains information about our new products under development, AGLAB 1000, BREATHTEST-1000 and PRO-CONTROL-1000. Product development involves a high degree of risk and uncertainty, and there can be no assurance that our new products will be successfully developed, achieve their intended benefits, receive full market authorization, or be commercially successful. In addition, FDA approval will be required to market BREATHTEST-1000 in the United States. Obtaining FDA approval is a complex and lengthy process, and there can be no assurance that FDA approval for BREATHTEST-1000 will be granted on a timely basis or at all. 

Forward-Looking Statements

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, the adverse impact of inflationary pressures, including significant increases in fuel costs, global economic conditions and events related to these conditions, including the ongoing wars in Ukraine and the middle east and the COVID-19 pandemic, the Company’s use of proceeds from the common stock offerings, whether we can successfully complete the development of our new products and proprietary technologies, whether we can obtain the FDA and other regulatory approvals required to market our products under development in the United States or abroad, whether the market will accept our products and services and whether we are successful in identifying, completing and integrating acquisitions, as well as other risk factors and business considerations described in the Company’s Securities and Exchange Commission filings including the Company’s most recent Annual Report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. While we do not intend to directly harvest, manufacture, distribute or sell cannabis or cannabis products, we may be detrimentally affected by a change in enforcement by federal or state governments and we may be subject to additional risks in connection with the evolving regulatory area and associated uncertainties. Any such effects may give rise to risks and uncertainties that are currently unknown or amplify others mentioned herein. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. In addition, any forward-looking statements included in this press release represent the Company’s views only as of the date of its publication and should not be relied upon as representing its views as of any subsequent date. The Company assumes no obligation to correct or update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Company Contact: Jaime Hinojosa, Chief Financial Officer, Astrotech Corporation, (512) 485-9530

Tables follow

ASTROTECH CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except per share data) (Unaudited)
		Three Months Ended								Nine Months Ended
		March 31,								March 31,
		2024				2023				2024				2023
Revenue		$	50			$	35			$	1,590			$	336
Cost of revenue			42				24				867				211
Gross profit			8				11				723				125
Operating expenses:
Selling, general and administrative			1,833				1,406				5,501				4,606
Research and development			1,708				1,355				5,158				3,847
Total operating expenses			3,541				2,761				10,659				8,453
Loss from operations			(3,533	)			(2,750	)			(9,936	)			(8,328	)
Other income and expense, net			379				375				1,229				1,006
Loss from operations before income taxes			(3,154	)			(2,375	)			(8,707	)			(7,322	)
Net loss		$	(3,154	)		$	(2,375	)		$	(8,707	)		$	(7,322	)
Weighted average common shares outstanding:
Basic and diluted			1,633				1,616				1,632				1,614
Basic and diluted net loss per common share:
Net loss per common share		$	(1.93	)		$	(1.47	)		$	(5.34	)		$	(4.54	)
Other comprehensive loss, net of tax:
Net loss		$	(3,154	)		$	(2,375	)		$	(8,707	)		$	(7,322	)
Available-for-sale securities:
Net unrealized gain/(loss)			13				181				284				(189	)
Total comprehensive loss		$	(3,141	)		$	(2,194	)		$	(8,423	)		$	(7,511	)

 

ASTROTECH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
	March 31,				June 30,
	2024				2023
	(Unaudited)				(Note)
Assets
Current assets
Cash and cash equivalents	$	8,487			$	14,208
Short-term investments		26,196				27,919
Accounts receivable		201				225
Inventory, net:
Raw materials		1,734				1,379
Work-in-process		251				243
Finished goods		359				373
Income tax receivable		—				1
Prepaid expenses and other current assets		274				365
Total current assets		37,502				44,713
Property and equipment, net		2,516				2,670
Operating lease right-of-use assets, net		155				262
Other assets, net		30				30
Total assets	$	40,203			$	47,675
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		612				546
Payroll related accruals		900				633
Accrued expenses and other liabilities		644				1,170
Lease liabilities, current		289				316
Total current liabilities		2,445				2,665
Accrued expenses and other liabilities, net of current portion		95				—
Lease liabilities, net of current portion		92				291
Total liabilities		2,632				2,956
Stockholders’ equity
Convertible preferred stock, $0.001 par value, 2,500,000 shares authorized; 280,898 shares of Series D issued and outstanding at March 31, 2024 and June 30, 2023		—				—
Common stock, $0.001 par value, 250,000,000 shares authorized at March 31, 2024 and June 30, 2023, respectively; 1,712,045 and 1,692,045 shares issued at March 31, 2024 and June 30, 2023, respectively; 1,701,729 and 1,681,729 outstanding at March 31, 2024 and June 30, 2023, respectively		190,643				190,643
Treasury shares, 10,316 at March 31, 2024 and June 30, 2023, respectively		(119	)			(119	)
Additional paid-in capital		82,277				81,002
Accumulated deficit		(234,061	)			(225,354	)
Accumulated other comprehensive loss		(1,169	)			(1,453	)
Total stockholders’ equity		37,571				44,719
Total liabilities and stockholders’ equity	$	40,203			$	47,675

Note: The condensed consolidated balance sheet at June 30, 2023, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by the United States generally accepted accounting principles for complete financial statements.

FAQ

What are the financial highlights for Astrotech (ASTC) in Q3 FY 2024?

Astrotech reported $34.7 million in cash and liquid investments and a year-to-date revenue of $1.6 million. The gross margin increased to 45% from 37% in the previous year.

What products drove revenue for Astrotech (ASTC) in Q3 FY 2024?

Revenue was primarily driven by sales of the TRACER 1000™ explosive trace detector and related maintenance services and consumables.

What is the gross margin improvement for Astrotech (ASTC) in Q3 FY 2024?

The gross margin improved to 45% from 37% year-over-year due to design improvements and higher sales prices.

What new product orders is 1st Detect accepting in Q3 FY 2024?

1st Detect is currently accepting orders for the TRACER 1000 Narcotics Trace Detector.

What is the significance of the TRACER 1000 being listed under the GSA IT Schedule 70?

The listing allows for easier procurement by U.S. federal agencies, facilitating sales to one of the largest buyers of goods and services.

What new subsidiary did Astrotech (ASTC) launch in Q3 FY 2024?

Astrotech launched Pro-Control, Inc. to leverage ATI Mass Spectrometer Technology for chemical manufacturing process control.

What event did Astrotech (ASTC) participate in early April 2024?

Astrotech showcased its TRACER 1000 NTD and ETD at the International Security Conference and Exposition (ISC West) in Las Vegas, Nevada.

What are Astrotech 's (ASTC) plans for sales and marketing in Q4 FY 2024?

Astrotech plans to expand its sales department and ramp up sales and marketing efforts to maintain momentum into FY 2025.