SOURCE: Orbit International Corp.

Orbit International Corp.

March 10, 2016 08:45 ET

Orbit International Corp. Reports 2015 Year End Results

Fourth Quarter 2015 Net Income of $583,000 ($0.14 per Share) v. Net Loss of $653,000 ($0.15 Loss per Share) in Prior Year Period

HAUPPAUGE, NY--(Marketwired - Mar 10, 2016) - Orbit International Corp. (OTC PINK: ORBT) today announced results for the fourth quarter and year ended December 31, 2015.

Fourth Quarter 2015 vs. Fourth Quarter 2014

  • Net sales were $5,518,000, as compared to $3,957,000.
  • Gross margin was 41.6%, as compared to 28.1%.
  • Net income was $583,000 ($0.14 per diluted share), as compared to a net loss of $653,000 ($0.15 loss per share).
  • Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $690,000 ($0.16 per diluted share), as compared to a loss of $542,000 ($0.12 loss per share).

Full Year 2015 vs. Full Year 2014

  • Net sales were $20,130,000, as compared to $19,160,000.
  • Gross margin was 38.1%, as compared to 34.5%.
  • Net income was $902,000 ($0.21 per diluted share), as compared to a net loss of $2,001,000 ($0.46 loss per share).
  • Net loss for the 2014 year includes $1,089,000 of costs associated with the consolidation of our Quakertown, PA facility into our Hauppauge, NY facility. Exclusive of these costs, net loss for the 2014 year was $912,000 ($0.21 loss per share). 
  • Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $1,288,000 ($0.30 per diluted share), as compared to a loss of $1,396,000 ($0.32 loss per share).
  • Backlog at December 31, 2015 was $11.1 million as compared to $10.3 million at September 30, 2015 and $12.0 million at December 31, 2014.

Mitchell Binder, President & Chief Executive Officer, stated, "Our results for the fourth quarter, and the full year, benefitted from the significant operating leverage our business generates as a result of an increase in our revenues. Our sales for the fourth quarter increased by 39% from the prior comparable period and due to the operating leverage and cost cutting measures we implemented over the past two years, our net income improved significantly."

Mr. Binder added, "We continue to keep our costs under control as evidenced by our improved gross margins and a 22% reduction in selling, general and administrative costs for the year ended 2015 as compared to 2014. Our challenge remains to drive our revenue levels higher and to further improve our operating margins. To that end, since the fourth quarter of 2015, we have received several new contracts that have resulted in the following:

  • Bookings in our fourth quarter of 2015 exceeded $6,300,000.
  • In January 2016, our Electronics Group received two awards for its displays on a major aviation program totaling in excess of $3,000,000.
  • Consolidated bookings for the month of January 2016 exceeded $4,650,000.
  • Due to additional orders received in February, our first quarter bookings through the end of February 2016 were in excess of $7,500,000 which compares to bookings of approximately $5,400,000 during the first two months of 2015.

Mr. Binder continued, "As a result of this activity, delivery schedules are well positioned in the third and fourth quarters of 2016. Our backlog at December 31, 2015 was $11.1 million and was slightly down from our $12.0 backlog at December 31, 2014. This was due to slightly lower backlogs at both our Electronics and Power Groups as well as the aforementioned 39% increase in 2015 fourth quarter sales during the current year. This reduction in backlog has been partially offset by the significant bookings that we have received during the first quarter of 2016 to date."

Mr. Binder added, "Our Power Group is working with its customers on several new opportunities for its COTS products. Furthermore, new customer alliances and the bid and proposal pipeline for our VPX products are also active. Most of our VPX contracts to date have been for pre-production orders with significant quantities projected once full production is attained. However, bookings in our commercial division remain weak due to a decrease in oil and gas activity and a weak capital spending environment." 

David Goldman, Chief Financial Officer, noted, "Our financial condition remains strong. At December 31, 2015, total current assets were approximately $16.2 million versus total current liabilities of approximately $1.7 million for a 9.8 to 1 current ratio. Cash, cash equivalents and marketable securities as of December 31, 2015, aggregated approximately $2.0 million. To offset future federal and New York State taxes resulting from profits, we have approximately $10 million and $3 million in available federal and New York State net operating loss carryforwards, respectively, which should enhance future cash flow."

Mr. Goldman added, "During the quarter, we continued to pay down our debt. Our tangible book value at December 31, 2015 was $3.10 as compared to $2.96 at September 30, 2015 and $2.89 at December 31, 2014 (this does not include any value for the potential deferred tax asset from our operating loss carryforwards that could offset future taxable income). During the fourth quarter of 2015, we purchased 11,670 shares of our common stock and from January 1, 2016 through March 3, 2016, we purchased an additional 22,890 shares. Since January 1, 2012, we have repurchased in excess of 493,000 shares of our stock in the marketplace at an average price of $3.41 per share."

Mr. Goldman concluded, "As previously announced, we amended our Credit Agreement with our primary lender in October 2015 whereby the maturity date for our $4 million committed line of credit was extended to August 1, 2017. We were in compliance with our financial covenants at December 31, 2015."

Mr. Binder concluded, "Our goal is to build on our 2015 earnings and continue to drive revenue to maximize our operating performance. Our Electronics Group has gotten off to a very strong start in 2016 and is currently working with our customers on several pending awards for both new and follow-on opportunities, although timing is always an uncertainty. In addition to VPX technology, our engineers are working with our key customers on certain next generation products, which we hope will secure our position on certain mission critical programs."

Orbit International Corp., through its Electronics Group, is involved in the manufacture of customized electronic components and subsystems for military and nonmilitary government applications through its production facility in Hauppauge, New York. Orbit's Power Group, also located in Hauppauge, NY, designs and manufactures a wide array of power products including AC power supplies, frequency converters, inverters, uninterruptible power supplies, VME/VPX power supplies as well as various COTS power sources. The Company also has a sales office in Newbury Park, CA and a facility in Louisville, KY dedicated to the design and manufacture of gun weapons systems as well as VME/VPX solutions including backplanes, health monitors, air transport racks and components.

Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company including, statements regarding our expectations of Orbit's operating plans, deliveries under contracts and strategies generally; statements regarding our expectations of the performance of our business; expectations regarding costs and revenues, future operating results, additional orders, future business opportunities and continued growth, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although Orbit believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.

Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond Orbit International's ability to control or predict. Important factors that may cause actual results to differ materially and that could impact Orbit International and the statements contained in this news release can be found in Orbit's reports posted with the OTC Disclosure and News service as well as Orbit's prior filings with the Securities and Exchange Commission including quarterly reports on Form 10-Q, current reports on Form 8-K, annual reports on Form 10-K and its other periodic reports. For forward-looking statements in this news release, Orbit claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Orbit assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

(See Accompanying Tables)

Orbit International Corp.  
Consolidated Statements of Income  
(in thousands, except per share data)  
    Three Months Ended
December 31,
    Year Ended
December 31,
    2015     2014     2015     2014  
Net sales   $ 5,518     $ 3,957     $ 20,130     $ 19,160  
Cost of sales     3,220       2,846       12,464       12,549  
Gross profit     2,298       1,111       7,666       6,611  
Selling general and administrative expenses     1,702       1,757       6,730       8,575  
Interest expense     8       10       35       41  
Investment and other (income) expense     (11 )     (22 )     (24 )     (36 )
Income (loss) before taxes     599       (634 )     925       (1,969 )
Income tax provision     16       19       23       32  
Net income (loss)   $ 583     $ (653 )   $ 902     $ (2,001 )
Basic income (loss) per share   $ 0.14     $ (0.15 )   $ 0.21     $ (0.46 )
Diluted income (loss) per share   $ 0.14     $ (0.15 )   $ 0.21     $ (0.46 )
Weighted average number of shares outstanding:                                
  Basic     4,302       4,382       4,358       4,384  
  Diluted     4,302       4,382       4,358       4,384  
Orbit International Corp.  
Consolidated Statements of Income  
(in thousands, except per share data)  
    Three Months Ended
December 31,
    Year Ended
December 31,
    2015   2014     2015   2014  
EBITDA (as adjusted) Reconciliation                            
Net income (loss)   $ 583   $ (653 )   $ 902   $ (2,001 )
Interest expense     8     10       35     41  
Tax expense     16     19       23     32  
Depreciation and amortization     69     68       273     440  
Stock based compensation     14     14       55     92  
EBITDA (as adjusted) (1)   $ 690   $ (542 )   $ 1,288   $ (1,396 )
EBITDA (as adjusted) Per Diluted Share Reconciliation                            
Net income (loss)   $ 0.14   $ (0.15 )   $ 0.21   $ (0.46 )
Interest expense     0.00     0.00       0.01     0.01  
Tax expense     0.00     0.01       0.01     0.01  
Depreciation and amortization     0.02     0.02       0.06     0.10  
Stock based compensation     0.00     0.00       0.01     0.02  
EBITDA (as adjusted), per diluted share (1)   $ 0.16   $ (0.12 )   $ 0.30   $ (0.32 )

(1) The EBITDA (as adjusted) tables presented are not determined in accordance with accounting principles generally accepted in the United States of America. Management uses EBITDA (as adjusted) to evaluate the operating performance of its business. It is also used, at times, by some investors, securities analysts and others to evaluate companies and make informed business decisions. EBITDA (as adjusted) is also a useful indicator of the income generated to service debt. EBITDA (as adjusted) is not a complete measure of an entity's profitability because it does not include costs and expenses for interest, depreciation and amortization, income taxes and stock based compensation. EBITDA (as adjusted) as presented herein may not be comparable to similarly named measures reported by other companies.

    Year Ended
December 31,
Reconciliation of EBITDA (as adjusted)
to cash flows provided by operating activities (1)
EBITDA (as adjusted)   $ 1,288     $ (1,396 )
Interest expense     (35 )     (41 )
Income tax expense     (23 )     (32 )
Loss (gain) on sale of marketable securities     3       (5 )
Gain on disposal of property and equipment     -       (5 )
Bond amortization     (5 )     (3 )
Net change in operating assets and liabilities     (987 )     1,732  
Cash flows provided by operating activities   $ 241     $ 250  
Orbit International Corp.
Consolidated Balance Sheets
    December 31, 2015     December 31, 2014  
Current assets:                
  Cash and cash equivalents   $ 1,747,000     $ 2,139,000  
Investments in marketable securities     235,000       284,000  
Accounts receivable, less allowance for doubtful accounts     3,264,000       1,891,000  
  Inventories     10,694,000       11,089,000  
  Income tax receivable     9,000       2,000  
  Other current assets     259,000       220,000  
Total current assets     16,208,000       15,625,000  
Property and equipment, net     408,000       641,000  
Goodwill     868,000       868,000  
Other assets     40,000       40,000  
    Total assets   $ 17,524,000     $ 17,174,000  
Current liabilities:                
Line of credit     -       1,725,000  
Accounts payable     608,000       503,000  
  Accrued expenses     856,000       902,000  
  Customer advances     189,000       190,000  
Total current liabilities     1,653,000       3,320,000  
Line of credit     1,410,000       -  
Other liabilities     16,000       37,000  
    Total liabilities     3,079,000       3,357,000  
Stockholders' Equity                
  Common stock     514,000       522,000  
  Additional paid-in capital     22,659,000       22,848,000  
  Treasury stock     (2,273,000 )     (2,225,000 )
 Accumulated other comprehensive loss     (37,000 )     (8,000 )
  Accumulated deficit     (6,418,000 )     (7,320,000 )
    Stockholders' equity     14,445,000       13,817,000  
    Total liabilities and stockholders' equity   $ 17,524,000     $ 17,174,000  

Contact Information

    Mitchell Binder
    President & Chief Executive Officer