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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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CONTACT or Investor Relations Counsel
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Mitchell Binder Lena Cati, 212-836-9611
President & Chief Executive Officer Linda Latman, 212-836-9609
631-435-8300 The Equity Group Inc.
ORBIT INTERNATIONAL CORP. REPORTS 2011 FIRST QUARTER RESULTS
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FIRST QUARTER NET INCOME OF $524,000 COMPARED TO NET LOSS OF $647,000
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ON 23.1% INCREASE IN NET SALES
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BACKLOG AT MARCH 31, 2011 WAS $21.2 MILLION,UP36.8% FROM ONE YEAR EARLIER
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Hauppauge, New York, May 10, 2011 - Orbit International Corp. (NASDAQ:ORBT), a
defense and industrial electronics manufacturer, systems integrator and software
solution provider, today announced results for the first quarter ended March 31,
2011.
FIRST QUARTER 2011 VS. FIRST QUARTER 2010
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- Net sales increased 23.1% to $6,812,000 from $5,532,000;
- Gross margin was 43.0% compared to 33.3%;
- Net income was $524,000 compared to a net loss of $647,000;
- Net income per diluted share was $0.11 compared to a net loss of $0.15 per
share;
- Earnings before interest, taxes, depreciation and amortization, and stock
based compensation (EBITDA, as adjusted) was $702,000 ($0.15 per diluted share)
compared to a loss of $351,000 ($0.08 loss per share); and,
- Backlog at March 31, 2011 was $21.2 million, up 36.8% from $15.5 million
at March 31, 2010. Of note, March 31, 2010 backlog was adjusted to reflect the
cancellation of a $2.1 million order previously included in backlog for that
period.
Mitchell Binder, President & Chief Executive Officer, stated, "The 23.1%
increase in net sales combined with the gross margin improvement and substantial
reduction in selling, general and administrative (S, G & A) expenses resulted in
a nearly $1.2 million increase in profitability from the 2010 comparable period.
All of the factors that we expected would improve operating performance for 2011
came to fruition in the current first quarter. Our gross margin increased to
43.0% compared to 33.3% and our S, G & A expenses as a percentage of net sales
declined to 34.8% as compared to 44.6% in the previous year's first quarter due
to the increase in sales, operating leverage inherent in our business, product
mix, savings related to the non-renewal of the contract of our former CEO as of
December 31, 2010 and lower rent for our Hauppauge facility."
Mr. Binder added, "Based upon our 36.8% increase in backlog which reached $21.2
million at March 31, 2011, we expect quarterly net sales and profitability for
the rest of 2011 to equal or exceed that of the first quarter. Business
conditions remain very good, particularly at our Power Group and Instrument
Division. Bookings for the entire Company for the first quarter were in excess
of $7.5 million, far exceeding the first quarter of 2010. In addition, bookings
for our Power Group through April 2011 are over 70% higher than the year
before."
The largest orders thus far this year with 2011 delivery dates are as follows:
- ICS has received an award valued in excess of $1,100,000 for its MK 437
Gun Mount Control Panels.
- Behlman received several new orders for COTS power supplies: a $269,000
follow-on order for a COTS power supply used in a shipboard-based satellite
communications system; a $205,000 order for a COTS power supply for a new power
application in a land-based satellite communication system; a $337,000 order for
COTS power supplies used in a satellite communication system; and, a $380,000
order for a COTS power supply used on the RC-135, a U.S. Air Force all-weather
airborne reconnaissance aircraft.
- Electronics Group received a follow-on order valued at approximately
$400,000 for RCUs to support ongoing Common Transponder Program requirements.
- Orbit Instrument Division received two orders: an order in excess of
$600,000 for data entry panels for the mission control in the E-2 Hawkeye and a
$603,000 order for STARS keyboards for use in air traffic control systems in
U.S. airports.
David Goldman, Chief Financial Officer, noted, "Our financial condition remains
strong. At March 31, 2011, total current assets were $20,412,000 versus total
current liabilities of $5,340,000 for a 3.8 to 1 current ratio. Cash, cash
equivalents and marketable securities as of March 31, 2011 were approximately
$950,000. Our inventories at March 31, 2011 increased by over $1 million from
December 31, 2010 due to increased shipments expected for the second and third
quarters due to customer delivery schedules. To enhance future cash flow, we
have approximately $22 million and $8 million in federal and state net operating
loss carryforwards, respectively, to offset profits from federal and state
taxes. Our tangible book value at March 31, 2011 was $3.19 per share, compared
to $3.07 per share at December 31, 2010 and $3.33 per share at March 31, 2010.
The Company was also in compliance with its financial covenants as of March 31,
2011."
Mr. Binder concluded, "We have a two-fold strategy for growth. We will continue
to pursue organic growth as we convert prototype awards into initial production
awards, obtain follow-on awards on existing programs, and by pursuing new
business opportunities. In addition, we are also pursuing strategic accretive
acquisitions, seeking primarily to expand our Power Group. Acquisitions of this
kind should enable us to grow our business faster and also achieve better
utilization at our existing facilities through consolidation. However, these
efforts are in its preliminary stage."
CONFERENCE CALL
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The Company will hold a conference call for investors today, May 10, 2011, at
11:00 a.m. ET. Interested parties may participate in the call by dialing
201-689-8037; 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 Orbit'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 associated analytical equipment. The Behlman military
division designs, manufactures and sells power units and electronic products for
measurement and display.
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 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)
2011 2010
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Net sales $6,812 $5,532
Cost of sales 3,885 3,690
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Gross profit 2,927 1,842
Selling general and administrative expenses 2,368 2,469
Interest expense 53 57
Investment and other (income) (34) (41)
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Net income (loss) before taxes 540 (643)
Income taxes 16 4
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Net income (loss) $ 524 $ (647)
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Basic earnings (loss) per share $ 0.11 $(0.15)
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Diluted earnings (loss) per share $ 0.11 $(0.15)
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Weighted average number of shares outstanding:
Basic 4,638 4,367
Diluted 4,662 4,367
ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2011 2010
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EBITDA Reconciliation (as adjusted)
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Net income (loss) $ 524 $ (647)
Interest expense 53 57
Income tax expense 16 4
Depreciation and amortization 69 153
Stock based compensation 40 82
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EBITDA (1) $ 702 $ (351)
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Adjusted EBITDA Per Basic and Diluted Share Reconciliation
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Net income (loss) $0.11 $(0.15)
Interest expense 0.01 0.01
Income tax expense 0.00 0.00
Depreciation and amortization 0.02 0.04
Stock based compensation 0.01 0.02
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EBITDA per basic and diluted share (1) $0.15 $(0.08)
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(1) The EBITDA tables (as adjusted) presented are 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, securities
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 (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. Adjusted EBITDA 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) 2011 2010
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EBITDA (as adjusted) $ 702 $(351)
Interest expense (53) (57)
Income tax expense (16) (4)
Bond amortization - 1
Inventory reserves 40 8
(Gain) loss on sale of marketable securities (5) 5
Deferred income (22) (21)
Net change in operating assets and liabilities (2,142) (555)
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Cash flows used in operating activities $(1,496) $(974)
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ORBIT INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2011 DECEMBER 31, 2010
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(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 804,000 $ 1,964,000
Investments in marketable securities 152,000 146,000
Accounts receivable, less allowance for doubtful accounts 4,570,000 3,927,000
Inventories 12,770,000 11,627,000
Costs and estimated earnings in excess of billings on uncompleted contracts 532,000 468,000
Deferred tax asset 602,000 391,000
Other current assets 982,000 1,043,000
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Total current assets 20,412,000 19,566,000
Property and equipment, net 1,171,000 1,172,000
Goodwill 1,688,000 1,688,000
Deferred tax asset 1,635,000 1,847,000
Other assets 104,000 106,000
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Total assets $25,010,000 $ 24,379,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 931,000 $ 931,000
Accounts payable 1,188,000 794,000
Notes payable-bank 1,017,000 387,000
Liability associated with former chief executive officer 1,081,000 1,194,000
Accrued expenses 1,001,000 1,051,000
Customer advances 37,000 118,000
Deferred income 85,000 85,000
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Total current liabilities 5,340,000 4,560,000
Deferred income 64,000 86,000
Liability associated with former chief executive officer, net of current portion 29,000 494,000
Long-term debt, net of current portion 2,793,000 3,026,000
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Total liabilities 8,226,000 8,166,000
Stockholders' Equity
Common stock 510,000 510,000
Additional paid-in capital 22,403,000 22,360,000
Treasury stock (915,000) (915,000)
Accumulated other comprehensive gain 23,000 19,000
Accumulated deficit (5,237,000) (5,761,000)
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Stockholders' equity 16,784,000 16,213,000
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Total liabilities and stockholders' equity $25,010,000 $ 24,379,000
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