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Orbit International Corp. Reports 2010 Third Quarter Results

^{Published on 2010-11-09 08:35:30 - Market Wire}
 

HAUPPAUGE, N.Y.--([ BUSINESS WIRE ])--Orbit International Corp. (NASDAQ:ORBT), an electronics manufacturer, systems integrator and software solution provider, today announced results for the third quarter and nine month periods ended September 30, 2010.

"Given our current backlog and delivery schedules for the remainder of the year, we anticipate strong operating results for the fourth quarter. These recent contract awards, plus several new program opportunities we are pursuing with recurring revenue potential, should also have a positive long-term impact on our operating performance."

Third Quarter 2010vs. Third Quarter 2009

• Net sales increased by 6.2% to $7,299,000 compared to $6,876,000;
• Gross margin was 38.6% compared to 39.6%;
• Net income increased 59% to $509,000 compared to $320,000;
• Earnings per diluted share was $.11, compared to $.07 per diluted share; and,
• Earnings before interest, taxes, depreciation and amortization, and stock based compensation (EBITDA, as adjusted) was $713,000 ($.16 per diluted share) compared to $641,000 ($.14 per diluted share).

Nine Months 2010vs. Nine Months 2009

• Net sales increased by 4.1% to $19,803,000 from $19,029,000;
• Gross margin was 36.4% compared to 39.7%;
• Net income was $3,000 or $.00 per diluted share compared to a net loss of $27,000 or $.01 per share;
• EBITDA, as adjusted decreased to $733,000 ($.16 per diluted share) compared to $935,000 ($.22 per diluted share); and,
• Backlog at September 30, 2010 increased 23% to $20.1 million, compared to $16.4 million at June 30, 2010; and 6% ahead of the $18.9 million reported at September 30, 2009.

Dennis Sunshine, President and Chief Executive Officer stated, aAs expected, our financial performance for the third quarter not only improved as compared to the same period of last year but also as compared to the to the second quarter of 2010. For the nine month period, although we had increased sales compared to the prior year, gross margin was adversely affected by higher than expected labor and material costs associated with the $4.1 million MK 119 contract that was completed in the second quarter. However, we did offset the losses through the first half of the year due to increased sales and lower SG&A expenses.a

Sunshine noted, aAs a result of our effort pursuing several new and upgrade program opportunities, both our Power and Electronics Groups received several large contract awards in the third quarter, resulting in a 23% increase in our backlog at September 30, 2010, as compared to June 30, 2010. Most of these awards have the potential for additional orders.

Among the major orders received by our Power Group are:

• Behlmana™s COTS division received:
  • An order valued in excess of $530,000 for a power supply to be used on the RC-135, a U.S. Air Force (USAF) all-weather surveillance and reconnaissance aircraft. Deliveries under this contract are expected to commence in the fourth quarter of 2010 and continue through the second quarter of 2011.
  • A $1,742,000 order for a power supply used in a U.S. Naval anti-submarine and anti-ship surveillance and targeting system. Deliveries under this contract are expected to commence in the fourth quarter of 2010 and continue through the fourth quarter of 2011.
  • Several new orders totaling in excess of $450,000 for power supplies for a major missile defense system as well as for a major display console used by the U.S. Naval fleet. Deliveries under these new contracts are expected to commence in the first quarter of 2011 and continue through the fourth quarter of 2011.
• Behlmana™s Commercial division received orders in excess of $650,000 for power supplies used in a broad array of applications including oil and gas exploration, railroad signaling and military systems. Deliveries under these new contracts are expected to commence in the fourth quarter of 2010 and continue through the fourth quarter of 2011.

The Electronics Group also received several large orders with potential for additional awards, as follows:

• An order valued at more than $2.1 million for Remote Control Units (aRCUsa) to support the ongoing Common Transponder Program (aCXPa) requirements of the U.S. Navy and U.S. Army. Deliveries under this contract are expected to commence during the second quarter of 2011 and be completed by the fourth quarter of 2011.
• ICS subsidiary received several awards released against multi-year IDIQ agreements from a U.S. Navy Procurement Agency valued in excess of $2,465,000 for its MK 119 Gun Computer System Cabinet (GCSC) and MK 437 Gun Mount Control Panels (GMCP). Total system deliveries under these contract awards are expected to commence in the first quarter of 2011 and continue through the third quarter of 2011.

Sunshine added, aGiven our current backlog and delivery schedules for the remainder of the year, we anticipate strong operating results for the fourth quarter. These recent contract awards, plus several new program opportunities we are pursuing with recurring revenue potential, should also have a positive long-term impact on our operating performance.a

Mitchell Binder, Chief Financial Officer, added, aOur financial condition remains strong. At September 30, 2010, total current assets were $19,491,000 versus total current liabilities of $3,798,000 for a 5.1 to 1 current ratio. With approximately $20 million and $7 million in federal and state net operating loss carryforwards respectively, we should continue to shield profits from federal and state taxes and enhance future cash flow.a

Binder noted, aOur cash, cash equivalents and marketable securities as of September 30, 2010 were approximately $3 million. In addition our tangible book value at September 30, 2010 was $3.45 per share, compared to $3.33 per share at June 30, 2010.a Binder also pointed out that the Company was in compliance with its bank covenants as of September 30, 2010.

Conference Call

The Company will hold a conference call for investors today, November 9, 2010, at 11:00 a.m. ET. Interested parties may participate in the call by dialing 706 679-3204; please call in 10 minutes before the conference call is scheduled to begin and ask for the Orbit International conference call. After opening remarks, there will be a question and answer period. The conference call will also be broadcast live over the Internet. To listen to the live call, please go to [ www.orbitintl.com ] and click on the Investor Relations section. Please go to the website at least 15 minutes early to register, and download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at Orbita™s website. We suggest listeners use Microsoft Explorer as their browser.

Orbit International Corp. is involved in the manufacture of customized electronic components and subsystems for military and nonmilitary government applications through its production facilities in Hauppauge, New York, and Quakertown, Pennsylvania; and designs and manufactures combat systems and gun weapons systems, provides system integration and integrated logistics support and documentation control at its facilities in Louisville, Kentucky. Its Behlman Electronics, Inc. subsidiary manufactures and sells high quality commercial power units, AC power sources, frequency converters, uninterruptible power supplies and COTS power solutions.

Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company including, but not limited to, statements regarding any acquisition proposal and/or the potential sale of the Company and whether such proposal or a strategic alternative thereto may be considered or consummated; statements regarding the Companya™s expectations of its operating plans, deliveries under contracts and strategies generally; statements regarding its expectations of the performance of 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 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.

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