HAUPPAUGE, NY--(Marketwired - May 7, 2015) - Orbit International Corp. (
First Quarter 2015 vs. First Quarter 2014
- Net sales were $4,214,000, as compared to $5,007,000.
- Gross margin was 32.8%, as compared to 30.0%.
- Net loss was $326,000 ($0.07 loss per share), as compared to a net loss of $1,062,000 ($0.24 loss per share). The net loss for the first quarter of 2014 included an operating loss of $728,000 ($0.17 loss per share) associated with the consolidation of our Quakertown facility into our Hauppauge, NY facility.
- Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was a loss of $215,000 ($0.05 loss per share), as compared to a loss of $761,000 ($0.17 loss per share).
- Backlog at March 31, 2015 was $13.9 million compared to $9.6 million at March 31, 2014. Backlog at December 31, 2014 was $12.0 million.
Mitchell Binder, President & Chief Executive Officer, stated, "Our earnings for the quarter were adversely impacted by lower revenues which were mitigated somewhat by the impact of significant cost cutting measures that we have implemented since mid-2013. As we indicated in our year-end earnings release, lower revenues offset the impact of these cost cutting measures in 2014 and we expected these conditions would carry over into the first quarter of 2015."
Mr. Binder added, "However, the second half of 2014 marked a positive turnaround in our bookings which we believe has us positioned for improved operating results for the remainder of 2015. With our improved delivery schedules and lower cost structure, our operating leverage should have a positive impact on our operating margins. Due to extensive cost cutting, our gross margins should improve as revenue levels increase. In addition, our selling, general and administrative expenses are tracking considerably lower than the prior year."
Mr. Binder added, "Consolidated bookings for both our Electronics and Power Groups have exceeded $18,000,000 for the trailing three calendar quarters. Backlog at 3/31/15 was $13.9 million v. $9.6 million at 3/31/14, a 44.8% increase year over year and 16.1% higher than the $12.0 million backlog reported at year end. This increase was due principally to higher backlogs at both our Electronics and Power Groups and the significant increase in our bookings have improved our delivery schedules for 2015 and into 2016. Despite the improvement in our bookings, we remain in a very difficult industry. Our bid and proposal pipeline for follow-on opportunities is still good but we remain very cautious regarding the timing of actual awards. Consequently, we will continue to attempt to further reduce our costs to maximize our operating margins."
Mr. Binder continued, "Our operating performance for the first quarter of 2015 benefitted from the performance of our Power Group but was adversely affected by the results from our Electronics Group. However, our Electronics Group has realized a considerable improvement in bookings since the first half of 2014, with bookings for follow-on contracts as well as new applications. Consequently, we expect delivery schedules to improve for the remainder of 2015."
David Goldman, Chief Financial Officer, noted, "Our financial condition remains strong. At March 31, 2015, total current assets were approximately $15.5 million versus total current liabilities of approximately $3.4 million for a 4.5 to 1 current ratio. Cash, cash equivalents and marketable securities as of March 31, 2015, aggregated approximately $0.9 million, which is lower than year end due to an increase in accounts receivable and inventory as a result of our higher backlog. To offset future federal and state taxes resulting from profits, we have approximately $11 million and $4 million in available federal and New York State net operating loss carryforwards, respectively, which should enhance future cash flow. We were in compliance with our financial covenants at March 31, 2015."
Mr. Goldman added, "During the quarter, we continued to pay down our debt. In addition, since January 1, 2012, we have repurchased in excess of 368,000 shares of our stock in the marketplace at an average price of $3.55 per share. The repurchased shares include those repurchased beginning in November 2013, when our Board of Directors authorized management to purchase up to $400,000 of our common stock pursuant to a buy back program. Management purchased $200,000 of common stock under this program between November 2013 and February 2014. In anticipation of improved operating performance and positive cash flow, management may elect to resume the repurchase of common stock under this program if certain conditions are met. Our tangible book value at March 31, 2015 was $2.82 as compared to $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)."
Mr. Binder concluded, "Our Electronics Group once again reported bookings in excess of $1,000,000 for the month of April. Along with our pipeline of follow-on opportunities on existing programs, both our Electronics and Power Group continue to bid our new VPX technology into various programs. In a growing number of cases our products have been approved on certain platforms, many of which are awaiting funding. To date, our contract awards have been limited, but we remain encouraged that these new technologies will layer onto our existing business. We also continue to seek key alliances with prime contractors that can utilize our technology."
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.
| Orbit International Corp. | |||||||||
| Consolidated Statements of Operations | |||||||||
| (in thousands, except per share data) | |||||||||
| Three Months Ended March 31, (unaudited) |
|||||||||
| 2015 | 2014 | ||||||||
| Net sales | $ | 4,214 | $ | 5,007 | |||||
| Cost of sales | 2,831 | 3,507 | |||||||
| Gross profit | 1,383 | 1,500 | |||||||
| Selling general and administrative expenses | 1,683 | 2,543 | |||||||
| Interest expense | 9 | 11 | |||||||
| Investment and other (income) | (4 | ) | (10 | ) | |||||
| Loss before income taxes | (305 | ) | (1,044 | ) | |||||
| Income taxes | 21 | 18 | |||||||
| Net loss | $ | (326 | ) | $ | (1,062 | ) | |||
| Basic loss per share | $ | (0.07 | ) | $ | (0.24 | ) | |||
| Diluted loss per share | $ | (0.07 | ) | $ | (0.24 | ) | |||
| Weighted average number of shares outstanding: | |||||||||
| Basic | 4,399 | 4,379 | |||||||
| Diluted | 4,399 | 4,379 | |||||||
| Orbit International Corp. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended March 31, |
||||||||
| 2015 | 2014 | |||||||
| EBITDA (as adjusted) Reconciliation | ||||||||
| Net loss | $ | (326 | ) | $ | (1,062 | ) | ||
| Interest expense | 9 | 11 | ||||||
| Income tax expense | 21 | 18 | ||||||
| Depreciation and amortization | 68 | 246 | ||||||
| Stock based compensation | 13 | 26 | ||||||
| EBITDA (as adjusted) (1) | $ | (215 | ) | $ | (761 | ) | ||
| EBITDA (as adjusted) Per Basic and Diluted Share Reconciliation | ||||||||
| Net loss | $ | (0.07 | ) | $ | (0.24 | ) | ||
| Interest expense | 0.00 | 0.00 | ||||||
| Income tax expense | 0.00 | 0.00 | ||||||
| Depreciation and amortization | 0.02 | 0.06 | ||||||
| Stock based compensation | 0.00 | 0.01 | ||||||
| EBITDA (as adjusted) per basic and diluted share (1) | $ | (0.05 | ) | $ | (0.17 | ) | ||
| (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 used in operating activities (1) |
2015 |
2014 |
||||||
| EBITDA (as adjusted) | $ | (215 | ) | $ | (761 | ) | ||
| Interest expense | (9 | ) | (11 | ) | ||||
| Income tax expense | (21 | ) | (18 | ) | ||||
| Bond amortization | (1 | ) | (2 | ) | ||||
| Loss (gain) on sale of marketable securities | 1 | (3 | ) | |||||
| Net change in operating assets and liabilities | (1,194 | ) | (60 | ) | ||||
| Cash flows used in operating activities | $ | (1,439 | ) | $ | (855 | ) | ||
| Orbit International Corp. | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| March 31, 2015 (unaudited) |
December 31, 2014 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 614,000 | $ | 2,139,000 | ||||||
| Investments in marketable securities | 283,000 | 284,000 | ||||||||
| Accounts receivable, less allowance for doubtful accounts | 2,936,000 | 1,891,000 | ||||||||
| Inventories | 11,431,000 | 11,089,000 | ||||||||
| Other current assets | 208,000 | 222,000 | ||||||||
| Total current assets | 15,472,000 | 15,625,000 | ||||||||
| Property and equipment, net | 587,000 | 641,000 | ||||||||
| Goodwill | 868,000 | 868,000 | ||||||||
| Other assets | 40,000 | 40,000 | ||||||||
| Total assets | $ | 16,967,000 | $ | 17,174,000 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Line of credit | $ | 1,650,000 | $ | 1,725,000 | ||||||
| Accounts payable | 669,000 | 503,000 | ||||||||
| Accrued expenses | 879,000 | 902,000 | ||||||||
| Income tax payable | 15,000 | - | ||||||||
| Customer advances | 217,000 | 190,000 | ||||||||
| Total current liabilities | 3,430,000 | 3,320,000 | ||||||||
| Other non-current liabilities | 31,000 | 37,000 | ||||||||
| Total liabilities | 3,461,000 | 3,357,000 | ||||||||
| Stockholders' Equity | ||||||||||
| Common stock | 522,000 | 522,000 | ||||||||
| Additional paid-in capital | 22,862,000 | 22,848,000 | ||||||||
| Treasury stock | (2,225,000 | ) | (2,225,000 | ) | ||||||
| Accumulated other comprehensive loss | (7,000 | ) | (8,000 | ) | ||||||
| Accumulated deficit | (7,646,000 | ) | (7,320,000 | ) | ||||||
| Stockholders' equity | 13,506,000 | 13,817,000 | ||||||||
| Total liabilities and stockholders' equity | $ | 16,967,000 | $ | 17,174,000 | ||||||
Contact Information:
CONTACT
Mitchell Binder
President & Chief Executive Officer
631-435-8300