Astrotech Reports Second Quarter Of Fiscal Year 2024 Financial Results
- Astrotech Corporation reported a significant revenue increase of 512% year-to-date, reaching $1,540 thousand in Q2 FY 2024.
- The company's consolidated balance sheet remains strong with $37 million in cash and liquid investments, supporting research, development, and potential acquisitions.
- Gross margin for fiscal year 2024 improved to 46% from 38% in the previous year, reflecting operational efficiencies and product enhancements.
- 1st Detect reentered TSA testing for cargo security, a crucial step towards approval for cargo screening sales in the US.
- The launch of Pro-Control by Astrotech focuses on applying Mass Spectrometer Technology in chemical manufacturing process control applications.
- Production and sales efforts for AgLAB 1000-D2 continued, showcasing strong sales performance in the second quarter of fiscal year 2024.
- None.
Insights
The significant year-to-date revenue increase of 512% for Astrotech Corporation is a substantial development, indicating a robust demand for their TRACER 1000™ explosive trace detectors. This surge in revenue is particularly noteworthy given the niche market of security technology. The company's strategy to refine and ruggedize their equipment, leading to an improved gross margin from 38% to 46%, suggests operational efficiencies and potential for sustained profitability. The strong balance sheet, with $37 million in cash and liquid investments, provides the company with a solid foundation for future R&D and strategic acquisitions.
Investors should note the potential for revenue growth upon successful TSA approval for cargo security screening sales in the U.S. This could open a sizable new market for the company. However, investors should also be aware of the risks involved in government testing and the regulatory approval process, which can be unpredictable and lengthy.
Astrotech's entry into the chemical manufacturing process control sector with the launch of Pro-Control, Inc. represents diversification into a new application of their mass spectrometer technology. The focus on improving potency, purity and yields in chemical processes could cater to the needs of a wide range of industries, potentially creating additional revenue streams. The exhibition of the AgLAB 1000-D2™ at MJ BizCon indicates a strategic marketing effort to tap into the burgeoning cannabis industry, which has shown a high demand for such technological advancements.
While the company is diversifying its product offerings, it's important to consider the competitive landscape of the chemical process control market and the adoption rate of new technologies in the cannabis sector. Investors should consider the company's ability to penetrate these markets and the long-term sustainability of their growth.
The TRACER 1000's reported reduction in false alarms compared to traditional Ion Mobility Spectrometry (IMS) machines could be a significant competitive advantage in the security screening market. This innovation, coupled with minimal training requirements, positions the TRACER 1000 as a user-friendly yet advanced solution for explosive detection.
However, the adoption of new technologies in airport security is often influenced by regulatory bodies such as the European Civil Aviation Conference (ECAC). Astrotech's mention of ECAC approval is a key indicator of the product's compliance with stringent security standards, which could facilitate adoption in European airports. Stakeholders should monitor the ongoing TSA testing, as U.S. approval could substantially impact the company's market positioning and financial performance.
AUSTIN, Texas, Feb. 12, 2024 (GLOBE NEWSWIRE) -- Astrotech Corporation (Nasdaq: ASTC) (the “Company” or “Astrotech”) reported its financial results for the second quarter of fiscal year 2024, which ended December 31, 2023.
Financial Highlights & Recent Developments
- Year-to-date revenue totaled
$1,540 thousand compared to$301 thousand in the comparative period in the prior year. This represents an increase of512% . The growth was predominantly due to the Company successfully delivering on two previously announced purchase orders for TRACER 1000™ explosive trace detectors (ETDs) to customers in Romania. - Astrotech’s consolidated balance sheet remains strong with
$37 million in cash and liquid investments, which are anticipated to support our research and development, organic growth, and potential acquisition targets. - Year-to-date fiscal year 2024 gross margin increased to
46% from38% during the comparative period in the prior year, as we continue to benefit from the further refining and ruggedizing of our equipment. - After the end of the quarter, 1st Detect reentered detection and non-detection testing with the U.S. Transportation Security Administration (TSA) for cargo security. Successful completion of TSA cargo detection testing is the final step to be listed on the Air Cargo Screening Technology List as an “approved” device. If approved, we believe the TRACER 1000 will be approved for cargo security screening sales in the United States.
- Pro-Control, Inc (Pro-Control) was launched December 12, 2023, and is focused on applying the Astrotech Mass Spectrometer Technology™ (AMS Technology) in chemical manufacturing process control applications developed by AgLAB. The Pro-Control Maximum Value Process™ and the Pro-Control-1000™ mass spectrometer are designed to test, measure and increase potency, purity and weight yields in the chemical manufacturing processes.
- Production and sales efforts continue for the AgLAB 1000-D2™, which utilizes the Maximum Value Process™. We exhibited it at this year’s MJ BizCon held late in the second quarter of fiscal year 2024.
“Fiscal year 2024 continued with strong sales at 1st Detect as we successfully fulfilled our two significant Tracer 1000 orders,” stated Thomas B. Pickens, III, Astrotech’s Chairman, Chief Executive Officer, and Chief Technology Officer. “We are gaining traction with the checkpoint market, especially with those customers looking to the future, by bringing the world’s first ECAC approved mass spectrometer ETD to their airports. Our ruggedized ETD brings the selectivity of a mass spectrometer to the checkpoint, and our customers have reported less false alarms while using our ETD compared to traditional IMS machines. This requires little to no additional training normally associated with using a traditional mass spectrometer. Further, the Pro-Control subsidiary was launched late this quarter and we look forward to introducing Pro-Control to chemical manufacturers who are using vacuum distillation,” stated Thomas B. Pickens, III.
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 is developing chemical analyzers for use in the agriculture market. BreathTech is developing a breath analysis tool to provide early detection of lung diseases. 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 | Six Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 1,115 | $ | 263 | $ | 1,540 | $ | 301 | |||||||
| Cost of revenue | 583 | 155 | 825 | 187 | |||||||||||
| Gross profit | 532 | 108 | 715 | 114 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 2,022 | 1,558 | 3,668 | 3,200 | |||||||||||
| Research and development | 1,578 | 1,364 | 3,450 | 2,492 | |||||||||||
| Total operating expenses | 3,600 | 2,922 | 7,118 | 5,692 | |||||||||||
| Loss from operations | (3,068 | ) | (2,814 | ) | (6,403 | ) | (5,578 | ) | |||||||
| Other income and expense, net | 427 | 396 | 850 | 631 | |||||||||||
| Net loss | $ | (2,641 | ) | $ | (2,418 | ) | $ | (5,553 | ) | $ | (4,947 | ) | |||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic and diluted | 1,631 | 1,613 | 1,631 | 1,613 | |||||||||||
| Basic and diluted net loss per common share: | |||||||||||||||
| Net loss per common share | $ | (1.62 | ) | $ | (1.50 | ) | $ | (3.40 | ) | $ | (3.07 | ) | |||
| Other comprehensive loss, net of tax: | |||||||||||||||
| Net loss | $ | (2,641 | ) | $ | (2,418 | ) | $ | (5,553 | ) | $ | (4,947 | ) | |||
| Available-for-sale securities: | |||||||||||||||
| Net unrealized loss | 325 | (2 | ) | 270 | (370 | ) | |||||||||
| Total comprehensive loss | $ | (2,316 | ) | $ | (2,420 | ) | $ | (5,283 | ) | $ | (5,317 | ) | |||
ASTROTECH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
| December 31, | June 30, | ||||||
| 2023 | 2023 | ||||||
| (Unaudited) | (Note) | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 11,096 | $ | 14,208 | |||
| Short-term investments | 26,183 | 27,919 | |||||
| Accounts receivable | 294 | 225 | |||||
| Inventory, net: | |||||||
| Raw materials | 1,530 | 1,379 | |||||
| Work-in-process | 275 | 243 | |||||
| Finished goods | 260 | 373 | |||||
| Income tax receivable | — | 1 | |||||
| Prepaid expenses and other current assets | 426 | 365 | |||||
| Total current assets | 40,064 | 44,713 | |||||
| Property and equipment, net | 2,546 | 2,670 | |||||
| Operating lease right-of-use assets, net | 191 | 262 | |||||
| Other assets, net | 30 | 30 | |||||
| Total assets | $ | 42,831 | $ | 47,675 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities | |||||||
| Accounts payable | 567 | 546 | |||||
| Payroll related accruals | 817 | 633 | |||||
| Accrued expenses and other liabilities | 621 | 1,170 | |||||
| Lease liabilities, current | 309 | 316 | |||||
| Total current liabilities | 2,314 | 2,665 | |||||
| Accrued expenses and other liabilities, net of current portion | 91 | — | |||||
| Lease liabilities, net of current portion | 152 | 291 | |||||
| Total liabilities | 2,557 | 2,956 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Convertible preferred stock, | — | — | |||||
| Common stock, | 190,643 | 190,643 | |||||
| Treasury shares, 10,316 at December 31, 2023 and June 30, 2023, respectively | (119 | ) | (119 | ) | |||
| Additional paid-in capital | 81,839 | 81,002 | |||||
| Accumulated deficit | (230,907 | ) | (225,354 | ) | |||
| Accumulated other comprehensive loss | (1,182 | ) | (1,453 | ) | |||
| Total stockholders’ equity | 40,274 | 44,719 | |||||
| Total liabilities and stockholders’ equity | $ | 42,831 | $ | 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.
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