Acquisition is Expected to be Accretive
Q-Vio’s Sales Approximately $2,000,000-$2,500,000 Annually Since 2016 with Gross Margins in Excess of 40%
Q-Vio Specializes in the Design and Enhancement of LCD Display Modules
Q-Vio to Close its Operations in San Diego, CA
All Manufacturing to be Moved to Orbit’s Hauppauge, NY Facility
HAUPPAUGE, N.Y., Aug. 23, 2019 (GLOBE NEWSWIRE) -- Orbit International Corp. (“Orbit”) (OTC PINK:ORBT), an electronics manufacturer and software solution provider, today announced that it has purchased the assets of Q-Vio, LLC, a leader in the enhancement of LCD display modules. The transaction has been structured as an asset sale in which Orbit, through a newly formed subsidiary that will operate under the name Q-Vio Corp., will purchase substantially all of Q-Vio LLC’s assets and assume certain of its liabilities. The purchase price will consist almost entirely of an earn-out to Q-Vio LLC based on the attainment of certain revenue and gross profit benchmarks through December 31, 2022.
Q-Vio Corp. will operate as a wholly owned subsidiary of Orbit and become part of the Orbit Electronics Group (“OEG”). Q-Vio LLC’s annual sales have been approximately $2,000,000-$2,500,000 since 2016 with gross margins in excess of 40%. Q-Vio LLC’s current backlog is in excess of $900,000 and sells its products in the military, industrial, marine and broadcast marketplaces. In addition, Q-Vio LLC, which is located in San Diego, California, has an expiring lease as of August 31, 2019. Consequently, its operations in San Diego will be closed and all manufacturing and administrative functions will be moved to Orbit’s facility in Hauppauge, NY. Ray Pronko, Q-Vio LLC’s President, will become Vice President of Marketing and Sales of Q-Vio Corp. and will operate out of Orbit’s sales office in Bradenton, Florida. In addition, two Q-Vio LLC employees in mechanical engineering and sales application engineering will be retained by Orbit. Additionally, Q-Vio Corp. will continue Q-Vio LLC’s practice of utilizing several manufacturing contractors in China for certain high-volume sales opportunities in order to preserve its 40% gross margin objectives.
Mitchell Binder, President and CEO of Orbit International commented, “We welcome the addition of Q-Vio and incorporating its operation into our Hauppauge facility, which will enable us to take advantage of our excellent operating leverage. Consequently, this acquisition should be accretive to our Company’s earnings. In addition, we are confident that Ray Pronko will be a great addition to our sales organization and provide new sales opportunities for our OEG as well as our OEG sales team adding new opportunities for Q-Vio, particularly for military applications.”
Binder added, “Orbit has recently utilized Q-Vio LLC’s technology to develop next generation prototypes for certain of its military programs which are being evaluated by our customers. Furthermore, both Pronko and our sales team have identified certain business opportunities in the military marketplace where they believe Orbit and Q-Vio can team to provide solutions to Orbit’s customers thereby improving the overall sales of our OEG.”
Ray Pronko, President of Q-Vio LLC commented, “We are excited to become part of the Orbit organization and look forward to contributing to its future growth. Our display technology can stand up to the brightest sunlight conditions and provide our customers with superior performance. In addition to the many follow-on opportunities we are expecting, we believe Orbit’s financial strength and its sales organization will enable Q-Vio to extend our reach for many new business opportunities. We believe the demand for our sunlight readable technology will also provide Orbit the ability to increase its revenues beyond the military marketplace.”
Binder concluded, “Our profitability over the past several years has generated favorable operating cash flow and positioned us with a strong balance sheet. We have utilized our cash to repurchase 619,475 shares (14.8%) since January 1, 2017, instituted a quarterly cash dividend beginning in the third quarter of 2018 and will continue to seek out strategic accretive acquisitions, all to enhance shareholder value.”
Orbit International Corp., through its Electronics Group, is involved in the development and manufacture of custom electronic device and subsystem solutions 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 Bradenton, FL.
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. 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.
CONTACT
David Goldman
Chief Financial Officer
631-435-8300