Astrotech Reports Third Quarter of Fiscal Year 2018 Financial Results

May 14, 2018

AUSTIN, Texas–(BUSINESS WIRE)–$ASTC–Astrotech Corporation (NASDAQ:ASTC) reported its financial results for
the third quarter of fiscal year 2018 ended March 31, 2018.

ÔÇ£In the third quarter, we made progress at 1st Detect,
announcing two key milestones regarding our newly developed TRACER 1000,
which detects trace amounts of military, commercial, and homemade
explosives, plus narcotic substances such as fentanyl,ÔÇØ said Thomas B.
Pickens III, Chairman and CEO of Astrotech.

TSA Cargo Qualification: The TRACER 1000 was accepted into the
Transportation Security Administration (TSA)ÔÇÖs Air Cargo Screening
Qualification Test (ACSQT) program to address the needs of airports
and cargo facilities worldwide as they endeavor to screen 100% of
checked luggage and other cargo that is transported on passenger
aircraft, as mandated by the 9/11 Commission Act.
TSA Checkpoint Qualification: The TRACER 1000 began testing for
passenger screening at airport security checkpoints, entering the
Developmental Test & Evaluation (DT&E) phase of TSAÔÇÖs qualification
process. A successful DT&E phase will lead to Transportation Security
Laboratory (TSL) Certification, a significant endorsement that foreign
governments and other U.S. government agencies consider before
procuring ETDs. Certification is also a major step towards being
listed on TSAÔÇÖs Qualified Products List (QPL), and subsequently being
deployed in airports worldwide.

ÔÇ£We believe our mass spectrometry-based instrumentation provides far
superior detection capabilities compared to existing screening
technologies, and we are excited about its continued positive feedback
from TSA and its market potential,ÔÇØ continued Pickens. ÔÇ£We are also
pleased with the progress being made at Astral Images in gaining market
acceptance for its Astral ICE product suite, including the granting of a
key patent.ÔÇØ

Astral Images was awarded one new US patent: ÔÇÿUHD High Dynamic Range
Aesthetic Match (Continuation)ÔÇÖ (US), and 1st Detect
was awarded two new patents: ÔÇÿMass Spectrometers Having Real Time Ion
Isolation Signal GeneratorsÔÇÖ (US), and ÔÇÿEnd Cap Voltage Control of Ion
TrapsÔÇÖ (international).

Third Quarter Fiscal Year 2018 Financial Highlights

Revenue, costs of goods sold, SG&A, and R&D are expected to continue
to fluctuate based on the timing of projects.

Total operating expenses have been cut by $336 thousand, or 10.5%,
from the prior year third quarter. For the nine months ended March 31,
2018, total operating expenses have decreased $806 thousand, or 8.1%,
compared to the nine months ended March 31, 2017, as we focus on
securing certification for the TRACER 1000 and marketing Astral ICEÔäó.
During the current fiscal year, the Company has spent a total of $9.1
million on all projects and SG&A, compared to $11.1 million during the
same period in the prior fiscal year. This represents a decrease of
18.0% in total spending. The Company has realigned its resources to
focus on the TRACER 1000, as opposed to the government subcontracts
and R&D hybrid of the previous year. This has allowed the Company to
streamline its operations, which has resulted in the aforementioned
savings.
At March 31, 2018, cash and investments were $6.3 million, and there
was no debt.

About Astrotech

Astrotech (NASDAQ: ASTC) is an innovative science and technology company
that invents, acquires, and commercializes technological innovations
sourced from research institutions, laboratories, universities, and
internally, and then funds, manages, and builds proprietary, scalable
start-up companies for profitable divestiture to market leaders to
maximize shareholder value. 1st
Detect develops, manufactures, and sells chemical analyzers for
use in the security, defense, healthcare, food and beverage, and
environmental markets. Sourced from decades of image research from IBM
and Kodak laboratories, Astral
Images sells film-to-digital image enhancement, defect removal
and color correction software, as well as post-processing services
providing economically feasible conversion of television and feature
35mm and 16mm films to the new 4K ultra-high definition (UHD),
high-dynamic range (HDR) format necessary for the new generation of
digital distribution. Sourced from NASAÔÇÖs extensive microgravity
research, Astrogenetix
is applying a fast-track, on-orbit discovery platform using the
International Space Station to develop vaccines and other therapeutics.
Demonstrating its entrepreneurial strategy, Astrotech management sold
its state-of-the-art satellite servicing operations to Lockheed Martin
in August 2014. Astrotech has operations throughout Texas and is
headquartered in Austin. For information, please visit www.astrotechcorp.com.

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, whether we can
successfully develop our proprietary technologies and whether the market
will accept our products and services, as well as other risk factors and
business considerations described in the CompanyÔÇÖs Securities and
Exchange Commission filings including the annual report on Form 10-K.
Any forward-looking statements in this document should be evaluated in
light of these important risk factors. The Company assumes no obligation
to update these forward-looking statements.

Tables follow

ASTROTECH CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except per share data) (Unaudited)
Three Months Ended March 31,	Nine Months Ended March 31,
2018	2017	2018	2017
Revenue	$	ÔÇö	$	411	$	41	$	1,937
Cost of revenue	ÔÇö	161	24	1,211
Gross profit	ÔÇö	250	17	726
Operating expenses:
Selling, general and administrative	1,363	1,633	4,397	5,817
Research and development	1,495	1,561	4,721	4,107
Total operating expenses	2,858	3,194	9,118	9,924
Loss from operations	(2,858	)	(2,944	)	(9,101	)	(9,198	)
Interest and other income, net	3	99	103	232
Loss before income taxes	(2,855	)	(2,845	)	(8,998	)	(8,966	)
Income tax benefit	ÔÇö	(2	)	ÔÇö	(2	)
Net loss	(2,855	)	(2,847	)	(8,998	)	(8,968	)
Less: Net loss attributable to noncontrolling interest	ÔÇö	(47	)	ÔÇö	(150	)
Net loss attributable to Astrotech Corporation	$	(2,855	)	$	(2,800	)	$	(8,998	)	$	(8,818	)
Weighted average common shares outstanding:
Basic and diluted	4,060	4,033	4,059	4,095
Basic and diluted net loss per common share:
Net loss attributable to Astrotech Corporation	$	(0.70	)	$	(0.69	)	$	(2.22	)	$	(2.15	)
Other comprehensive loss, net of tax:
Net loss attributable to Astrotech Corporation	$	(2,855	)	$	(2,800	)	$	(8,998	)	$	(8,818	)
Available-for-sale securities:
Net unrealized (loss) gain	(32	)	18	(67	)	(21	)
Reclassification adjustment for realized loss	42	ÔÇö	76	60
Total comprehensive loss	$	(2,845	)	$	(2,782	)	$	(8,989	)	$	(8,779	)

ASTROTECH CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited)
March 31, 2018	June 30, 2017
Assets
Current assets
Cash and cash equivalents	$	633	$	2,184
Short-term investments	5,647	10,900
Accounts receivable, net of allowance	4	146
Inventory, net	9	166
Prepaid expenses and other current assets	269	269
Total current assets	6,562	13,665
Property and equipment, net	2,618	3,180
Long-term investments	50	1,990
Other assets, net	81	ÔÇö
Total assets	$	9,311	$	18,835
Liabilities and stockholdersÔÇÖ equity
Current liabilities
Accounts payable	$	124	$	259
Payroll related accruals	398	907
Accrued liabilities and other	406	641
Income tax payable	2	2
Total current liabilities	930	1,809
Other liabilities	216	256
Total liabilities	1,146	2,065
Commitments and contingencies
StockholdersÔÇÖ equity
Preferred stock, no par value, convertible, 2,500,000 shares authorized, no shares issued and outstanding, at March 31, 2018 and June 30, 2017, respectively	ÔÇö	ÔÇö
Common stock, no par value, 15,000,000 shares authorized; 4,505,473 and 4,508,509 shares issued at March 31, 2018 and June 30, 2017, respectively; 4,107,538 and 4,111,281 shares outstanding at March 31, 2018 and June 30, 2017, respectively	190,544	190,382
Treasury stock, 397,935 and 397,228 shares at cost at March 31, 2018 and June 30, 2017, respectively	(4,124	)	(4,121	)
Additional paid-in capital	1,708	1,483
Accumulated deficit	(179,911	)	(170,913	)
Accumulated other comprehensive loss	(52	)	(61	)
Total stockholdersÔÇÖ equity	8,165	16,770
Total liabilities and stockholdersÔÇÖ equity	$	9,311	$	18,835