SOURCE: Orbit International Corp.

Orbit International Corp.

May 05, 2016 08:45 ET

Orbit International Corp. Reports 2016 First Quarter Results

First Quarter Net Income $35,000 ($.01 per Share) v. Loss of $326,000 in Prior Year Quarter ($.07 loss per Share)

Backlog at 3/31/16 up 38% From Year-End

Board of Directors Authorizes New Share Repurchase Program

HAUPPAUGE, NY--(Marketwired - May 5, 2016) - Orbit International Corp. (OTC PINK: ORBT) today announced results for the first quarter ended March 31, 2016.

First Quarter 2016 vs. First Quarter 2015

  • Net sales were $4,801,000, as compared to $4,214,000.
  • Gross margin was 36.4%, as compared to 32.8%.
  • Net income was $35,000 ($0.01 per diluted share), as compared to a net loss of $326,000 ($0.07 loss per share).
  • Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $112,000 ($0.03 per diluted share), as compared to a loss of $215,000 ($0.05 loss per share).
  • Backlog at March 31, 2016 was $15.4 million compared to $13.9 million at March 31, 2015. Backlog at December 31, 2015 was $11.1 million.

Mitchell Binder, President & Chief Executive Officer, stated, "Our operating results for the current quarter marks the first time since 2011 that the Company has recorded a profitable first quarter and reflects the improving operating performance of our Electronics Group. Similar to our prior year operating trend, we expect our revenue levels to increase in the remaining quarters of 2016, which will lead to improved operating performance."

Mr. Binder added, "Our backlog at 3/31/16 was $15.4 million compared to $11.1 million at 12/31/15, a 38.1% increase. Our Electronics Group has gotten off to a strong start to 2016 with the receipt of several significant contracts that were previously announced during the first quarter. The cumulation of these awards pushed our consolidated bookings for our Electronics and Power Groups to over $9,000,000 for the first quarter. Consequently, we expect revenue levels will improve as delivery schedules are met from our increased backlog. With the operating leverage inherent in our business, we expect operating margins to improve in the coming quarters."

Mr. Binder continued, "We are encouraged by our bid and proposal pipeline for follow-on opportunities for both our Electronics and Power Groups. In addition to the high level of awards received in the first quarter, our Electronics Group is currently working with our customers on several additional follow-on contracts, some of which we expect to receive in the current second quarter of 2016. Our Power Group experienced relatively weak bookings in the first quarter but has noted an increase in its bid pipeline for its commercial products. We also continue to establish new alliances for our VPX technology and have both received and continue to bid on new pre-production awards with significant sales projected once full production is attained. However, the timing of actual awards is always an uncertainty."

David Goldman, Chief Financial Officer, noted, "Our financial condition remains strong. At March 31, 2016, total current assets were approximately $16.3 million versus total current liabilities of approximately $1.9 million for a 8.7 to 1 current ratio. Cash, cash equivalents and marketable securities as of March 31, 2016, aggregated approximately $2.3 million. To offset future federal and 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 paid down $130,000 of our debt which brought the balance owed under our line of credit to $1.28 million at March 31, 2016. In addition, we were in compliance with our financial covenants at March 31, 2016. Our tangible book value at March 31, 2016 was $3.11 as compared to $3.10 at December 31, 2015 and $2.82 at March 31, 2015 (this does not include any value for the potential deferred tax asset from our operating loss carryforwards that could offset future taxable income)."

Mr. Goldman concluded, "Since January 1, 2012, we have repurchased in excess of 493,000 shares of our stock in the marketplace (including 22,890 shares purchased in the first quarter) at an average price of $3.41 per share. Due to our improved operating performance and outlook for the remainder of the current fiscal year, our Board of Directors has authorized a new share repurchase program whereby management is authorized to buy up to $275,000 of its common stock in the marketplace through June 30, 2016. In addition, the Board has also authorized management to purchase up to $400,000 of its common stock during the period July 1, 2016 through June 30, 2017. These purchases would be in compliance with the credit agreement with our commercial lender."

Mr. Binder concluded, "After a nice turnaround in financial performance in 2015, our outlook for 2016 is encouraging, particularly with $9,000,000 in bookings in the first quarter. We are now benefiting from the restructuring of our business that we began back in 2013 as our margins have improved. Our goal remains to drive our revenue levels higher to take advantage of our operating leverage and to continue to work with our existing customers on new technology which we hope will secure us with next generation products that could secure us on new 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 Operations  
(in thousands, except per share data)  
   
    Three Months Ended
March 31,
(unaudited)
 
    2016     2015  
                 
Net sales   $ 4,801     $ 4,214  
                 
Cost of sales     3,053       2,831  
                 
Gross profit     1,748       1,383  
                 
Selling general and administrative expenses     1,703       1,683  
                 
Interest expense     8       9  
                 
Investment and other (income)     (6 )     (4 )
                 
Income (loss) before income taxes     43       (305 )
                 
Income taxes     8       21  
                 
Net income (loss)   $ 35     $ (326 )
                 
                 
Basic income (loss) per share   $ 0.01     $ (0.07 )
                 
Diluted income (loss) per share   $ 0.01     $ (0.07 )
                 
Weighted average number of shares outstanding:                
  Basic     4,291       4,399  
  Diluted     4,295       4,399  
                 
                 
   
Orbit International Corp.  
Consolidated Statements of Operations  
(in thousands, except per share data)  
(unaudited)  
   
    Three Months Ended
March 31,
 
    2016   2015  
               
EBITDA (as adjusted) Reconciliation              
Net income (loss)   $ 35   $ (326 )
Interest expense     8     9  
Income tax expense     8     21  
Depreciation and amortization     47     68  
Stock based compensation     14     13  
EBITDA (as adjusted) (1)   $ 112   $ (215 )
               
EBITDA (as adjusted) Per Basic and Diluted Share Reconciliation              
Net income (loss)   $ 0.01   $ (0.07 )
Interest expense     0.00     0.00  
Income tax expense     0.00     0.00  
Depreciation and amortization     0.01     0.02  
Stock based compensation     0.01     0.00  
EBITDA (as adjusted) per basic and diluted share (1)   $ 0.03   $ (0.05 )
   
(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.
   
   
       
       
    Three Months Ended
March 31,
 
Reconciliation of EBITDA, as adjusted, to cash flows provided by (used in) operating activities (1)  
2016
   
2015
 
                 
EBITDA (as adjusted)   $ 112     $ (215 )
Interest expense     (8 )     (9 )
Income tax expense     (8 )     (21 )
Bond amortization     (1 )     (1 )
Loss on sale of marketable securities     0       1  
Net change in operating assets and liabilities     471       (1,194 )
Cash flows provided by (used in) operating activities   $ 566     $ (1,439 )
                 
                 
   
   
Orbit International Corp.  
Consolidated Balance Sheets  
   
    March 31, 2016
(unaudited)
    December 31, 2015  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 2,160,000     $ 1,747,000  
Investments in marketable securities     178,000       235,000  
Accounts receivable, less allowance for doubtful accounts     2,903,000       3,264,000  
  Inventories     10,907,000       10,694,000  
Income tax receivable     -       9,000  
  Other current assets     150,000       259,000  
                 
Total current assets     16,298,000       16,208,000  
                 
Property and equipment, net     361,000       408,000  
Goodwill     868,000       868,000  
Other assets     40,000       40,000  
                 
      Total assets   $ 17,567,000     $ 17,524,000  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
                 
                 
Accounts payable     767,000       608,000  
  Accrued expenses     769,000       856,000  
  Income tax payable     3,000       -  
  Customer advances     326,000       189,000  
                 
Total current liabilities     1,865,000       1,653,000  
                 
Line of credit     1,280,000       1,410,000  
Other liabilities     9,000       16,000  
                 
      Total liabilities     3,154,000       3,079,000  
                 
Stockholders' Equity                
  Common stock     514,000       514,000  
  Additional paid-in capital     22,672,000       22,659,000  
  Treasury stock     (2,346,000 )     (2,273,000 )
Accumulated other comprehensive loss     (44,000 )     (37,000 )
  Accumulated deficit     (6,383,000 )     (6,418,000 )
                 
      Stockholders' equity     14,413,000       14,445,000  
                 
      Total liabilities and stockholders' equity   $ 17,567,000     $ 17,524,000  
                 

Contact Information

  • CONTACT
    Mitchell Binder
    President & Chief Executive Officer
    631-435-8300