Orbit International Corp. Reports 2021 Third Quarter Results

Third Quarter 2021 Net Income of $681,000 ($0.20 per diluted share) v. $864,000 ($0.25 per diluted share) in Prior Year Period

Third Quarter 2021 EBITDA, As Adjusted, of $736,000 ($0.21 per diluted share) v. $923,000 ($0.26 per diluted share) in Prior Year Period

Nine Months 2021 Net Income of $3,042,000 ($0.87 per diluted share) v. $488,000 ($0.14 per diluted share) in Prior Year Period

Nine Months 2021 EBITDA, As Adjusted, of $3,255,000 ($0.93 per diluted share) v. $685,000 ($0.19 per diluted share) in Prior Year Period

Exclusive of PPP Loan Forgiveness, Nine Months Net Income was $1,424,000 ($0.41 per diluted share) and EBITDA, As Adjusted was $1,637,000 ($0.47 per diluted share)

HAUPPAUGE, N.Y., Nov. 10, 2021 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT) today announced results for the third quarter and nine months ended September 30, 2021.

Third Quarter 2021 vs. Third Quarter 2020

• Net sales were $6,067,000, as compared to $7,887,000.
• Gross margin was 38.1%, as compared to 31.3%.
• Net income was $681,000 ($0.20 per diluted share), as compared to a net income of $864,000 ($0.25 per diluted share).
• Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was $736,000 ($0.21 per diluted share), as compared to $923,000 ($0.26 per diluted share).

Nine Months 2021 vs. Nine Months 2020

• Net sales were $17,261,000, as compared to $19,504,000.
• Gross margin was 35.9%, as compared to 27.3%.
• Net income was $3,042,000 ($0.87 per diluted share), as compared to net income of $488,000 ($0.14 per diluted share).
• Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was $3,255,000 ($0.93 per diluted share), as compared to $685,000 ($0.19 per diluted share).
• Backlog at September 30, 2021 was $16.3 million as compared to $15.1 million at June 30, 2021 and $17.9 at December 31, 2020.

Mitchell Binder, President and CEO of Orbit International Corp. commented, “Our net income for the nine months ended September 30, 2021, was $3,042,000 compared to $488,000 for the prior comparable period. Included in our current period results was $1,618,000 representing the forgiveness of our loan, including accrued interest, from Peoples United Bank under the Paycheck Protection Program (“PPP”) which was recorded in our first quarter. Exclusive of the PPP loan forgiveness, our net income for the current nine-month period was $1,424,000. Our net income for the three-month period ended September 30, 2021, was $681,000 compared to $864,000 in the prior comparable period. During the current third quarter, we recorded a decrease in sales compared to the prior comparable quarter, an improvement to our gross margin and an increase in selling, general and administrative expenses as many of our industry’s trade shows recommenced during the third quarter. Prior period earnings were positively affected by our sales recovery due to a return to regular productivity related to the COVID-19 pandemic.”

Mr. Binder added, “Our sales for the three months ended September 30, 2021, decreased to $6,067,000 compared to $7,887,000 from the prior comparable period. This decrease in sales was primarily attributable to a decrease in sales from our Orbit Power Group (“OPG”) due to the shipment of approximately $1,937,000 of lower margin CAATS shipments that were made in the prior period. The shipment of CAATS units made during the first quarter of 2021 completed the contract that had been received by our OPG in September 2017. Sales from our Orbit Electronics Group (“OEG”) for the three months ended September 30, 2021 slightly increased from the prior comparable period. Sales in the prior year third quarter were also positively affected by increased shipments resulting from a recovery in our deliveries as our manufacturing floor returned to normal working hours after experiencing lower productivity in the prior year second quarter because of the PAUSE executive order in response to the COVID-19 pandemic.”

Mr. Binder further added, “Our gross margin for the three months ended September 30, 2021, increased to 38.1% compared to 31.3% in the prior comparable period. This increase reflects a higher gross profit from both our OEG and OPG due to slightly increased sales at our OEG and a more profitable product mix from both operating segments. Our improved gross margin at our OPG should continue due to the completion of the lower gross margin CAATS contract which has been replaced by the higher gross margin shipments of our VPX power supplies and other COTS products. Selling, general and administrative expenses for the third quarter were higher than the comparable period of the prior year due to an increase in selling expenses from our OEG due to the recommencement of trade shows, and other selling costs and despite a decrease in selling, general and administrative costs from our OPG. Selling expenses are expected to increase for the fourth quarter as well due to the continued participation in trade shows.”

Mr. Binder continued, “Our backlog at September 30, 2021, was approximately $16,256,000 compared to approximately $17,879,000 at December 31, 2020. The reduction in backlog reflected a lower backlog at both of our operating segments. Our backlog increased from June 30, 2021, due to a firm third quarter of bookings from our OEG. In addition, our OPG continues to book new orders for its VPX power supplies, but it continues to be offset by weak bookings from its commercial division. We believe VPX opportunities will be the driver of future revenue growth for our OPG. We continue to receive orders to support customer prototype opportunities which may lead to production orders in 2022. Furthermore, we are expecting two sizable awards during the fourth quarter; one for VPX and the other for a COTS shipboard program, although the timing of the receipt of these orders could be delayed into 2022.”

David Goldman, Chief Financial Officer, noted, “At September 30, 2021, our cash and cash equivalents aggregated approximately $8.3 million and our financial condition continued to improve as evidenced by our 9.4 to 1 current ratio. Our tangible book value per share at September 30, 2021 was $5.56 which compares to $5.36 at June 30, 2021 and $4.70 at December 31, 2020. (Note: tangible book value per share does not include any additional value for our remaining reserved deferred tax asset). To offset future federal and state taxes resulting from profits, we have approximately $6.4 million and $0.6 million in available federal and New York State net operating loss carryforwards, respectively.”

Mr. Binder concluded, “Because our revenues are tied to our delivery schedules specified in our contracts, it often is difficult to judge our performance on a quarterly basis. We are pleased by our operating performance through the first three quarters of 2021. During the second quarter of 2021, based on our improved outlook on our business regarding the COVID-19 pandemic and stability of our financial condition, our Board of Directors authorized our Company to recommence our share repurchase program. Through November 8, 2021, we have purchased approximately 64,550 shares under the program. We remain confident in our operating performance for the remainder of 2021 and into 2022 although supply chain issues could have some impact on the timing of certain deliveries throughout 2022. Our operating team continues to work on potential solutions in the event certain receipt of certain components are delayed and impact delivery schedules.”

Orbit International Corp., through its Electronics Group, is involved in the development and manufacture of custom electronic device and subsystem solutions for military, industrial and commercial 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, VME/VPX power supplies as well as various COTS power sources.

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company was classified as an essential business by New York State and therefore was exempt from the state’s mandate that all non-essential businesses close their business locations until further notice. In addition, as a member of the Defense Industrial Base (“DIB”), the Company is mandated by the Secretary of Defense to continue to provide the essential products and services required to meet national security commitments to the Federal Government and the U.S. Military. The Company remains open while following guidance from the Centers for Disease Control (“CDC”) to best protect our employees. At this time, the length and severity of the COVID-19 pandemic is still unknown.

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                                
                

(See Accompanying Tables)

Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

(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, fair value adjustment-contingent liability and stock-based compensation. EBITDA (as adjusted) as presented herein may not be comparable to similarly named measures reported by other companies.

Orbit International Corp.
Consolidated Balance Sheets