Welcome!

News Feed Item

Orbit International Corp. Reports 2014 Second Quarter Results

Company Returns to Profitability, Exclusive of Facility Consolidation Costs

HAUPPAUGE, NY -- (Marketwired) -- 08/07/14 -- Orbit International Corp. (NASDAQ: ORBT) today announced results for the second quarter ended June 30, 2014.

Second Quarter 2014 vs. Second Quarter 2013

  • Net sales were $5,396,000, as compared to $6,475,000.
  • Gross margin was 41.5%, as compared to 38.6%.
  • Net loss was $171,000 ($0.04 loss per share), as compared to net income of $109,000 ($0.02 per diluted share).
  • Net loss for the second quarter of 2014 includes $351,000 of costs associated with the completion of our consolidation of our Quakertown, PA facility into our Hauppauge, NY facility. Exclusive of these costs, net income for the second quarter was $180,000 ($0.04 per diluted share). As of June 30, 2014, substantially all consolidation related costs have been incurred.
  • Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was a loss of $62,000 ($0.01 loss per share), as compared to earnings of $244,000 ($0.05 per diluted share).

First Half 2014 vs. First Half 2013

  • Net sales were $10,403,000, as compared to $12,922,000.
  • Gross margin was 35.9%, as compared to 38.6%.
  • Net loss was $1,233,000 ($0.28 loss per share), as compared to net income of $29,000 ($0.01 per diluted share).
  • Net loss for the first half of 2014 includes $1,079,000 of costs associated with the consolidation of our Quakertown, PA facility into our Hauppauge, NY facility. Exclusive of these costs, net loss for the first half of 2014 was $154,000 ($0.04 loss per share).
  • Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was a loss of $823,000 ($0.19 loss per share), as compared to earnings of $303,000 ($0.07 per diluted share).

Mitchell Binder, President & Chief Executive Officer, stated, "Our second quarter was a continuation of our efforts to restructure our business to significantly reduce our costs in order to offset difficult industry conditions. For the second quarter, our net income and EBITDA, as adjusted, improved year-over-year, exclusive of the costs associated with the completion of our consolidation of our Quakertown operations into our Hauppauge facility."

Mr. Binder added, "Despite a reduction in sales for the quarter, we recorded gross margin improvement resulting from these cost cutting initiatives and product mix. With the completion of the consolidation of Quakertown into Hauppauge, we should further benefit from the cost savings in the second half of 2014. However, these cost savings will be partially offset by lower revenues due to challenging industry conditions and more specifically, the delay in the award of certain legacy contracts, particularly for our Electronics Group, that will not have delivery schedules until 2015."

Mr. Binder continued, "Our operating performance for the second quarter of 2014 benefitted from the improved performance of our Power Group, which was insufficient to offset the results from our Electronics Group which included the costs associated with the completion of the consolidation of our Quakertown, PA facility into our Hauppauge, NY facility. For each of the third and the fourth quarters of 2014, we expect the results from our Power Group to be comparable to the second quarter but as mentioned earlier, we expect continued weakness from our Electronics Group."

Mr. Binder added, "Our backlog at June 30, 2014 was $8.2 million as compared to $9.6 million at March 31, 2014 due principally to a lower backlog at our Electronics Group. Our June 30, 2014 backlog for our Power Group was comparable to the backlog at March 31, 2014. However, the Company has received some significant contracts during the current third quarter and our bid and proposal pipeline continues to grow, particularly for our legacy business."

David Goldman, Chief Financial Officer, noted, "Our financial condition remains strong. At June 30, 2014, total current assets were approximately $16.7 million versus total current liabilities of approximately $1.8 million for a 9.3 to 1 current ratio. Cash, cash equivalents and marketable securities as of June 30, 2014, aggregated approximately $2.9 million. To offset future federal and state taxes resulting from profits, we have approximately $8 million and $7 million in available federal and state net operating loss carryforwards, respectively, which should enhance future cash flow. We were in compliance with our financial covenants at June 30, 2014."

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. Our tangible book value at June 30, 2014 was $3.07 as compared to $3.09 at March 31, 2014 and $3.32 per share at December 31, 2013."

Mr. Binder concluded, "We remain encouraged that our new VPX technologies will layer onto our existing business in our marketplace. Our industry-leading VPXtra power supplies, GUI driven health monitors as well as backplanes and related items can be found on our recently launched web portal -- vmevpx.com. However, the timing of awards, particularly in this environment, remains uncertain. We remain very cautious of challenging business conditions and continue to reduce costs wherever possible in order to improve our operating margins."

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 and designs and manufactures combat systems and gun weapons systems, provides system integration and integrated logistics support and documentation control at its facility in Louisville, Kentucky. The Power Group, through its Behlman Electronics, Inc. subsidiary, manufactures and sells high quality commercial power units, AC power sources, frequency converters, uninterruptible power supplies and inverters. The Behlman COTS division designs, manufactures and sells highly reliable power units for industrial and military applications.

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.



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

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------

Net sales                        $   5,396  $   6,475  $  10,403  $  12,922

Cost of sales                        3,159      3,978      6,666      7,934
                                 ---------  ---------  ---------  ---------

Gross profit                         2,237      2,497      3,737      4,988

Selling general and
 administrative expenses             2,384      2,355      4,927      4,886

Interest expense                        10         15         29         32

Investment and other (income)
 expense                                 3         (2)        (7)        (5)
                                 ---------  ---------  ---------  ---------

(Loss) income before taxes            (160)       129     (1,212)        75

Income tax provision                    11         20         21         46
                                 ---------  ---------  ---------  ---------

Net (loss) income                $    (171) $     109  $  (1,233) $      29
                                 =========  =========  =========  =========


Basic (loss) earnings per share  $   (0.04) $    0.02  $   (0.28) $    0.01

Diluted (loss) earnings per
 share                           $   (0.04) $    0.02  $   (0.28) $    0.01

Weighted average number of
 shares outstanding:
  Basic                              4,373      4,425      4,376      4,456
  Diluted                            4,373      4,459      4,376      4,491



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

                                    Three Months Ended    Six Months Ended
                                         June 30,             June 30,
                                      2014       2013      2014       2013
                                   ---------  --------- ---------  ---------

EBITDA (as adjusted)
 Reconciliation
Net (loss) income                  $    (171) $     109 $  (1,233) $      29
Interest expense                          10         15        29         32
Tax expense                               11         20        21         46
Depreciation and amortization             62         72       308        140
Stock based compensation                  26         28        52         56
                                   ---------  --------- ---------  ---------
EBITDA (as adjusted) (1)           $     (62) $     244 $    (823) $     303
                                   =========  ========= =========  =========

EBITDA (as adjusted) Per Diluted
 Share Reconciliation
Net (loss) income                  $   (0.04) $    0.02 $   (0.28) $    0.01
Interest expense                        0.00       0.00      0.01       0.01
Tax expense                             0.00       0.00      0.00       0.01
Depreciation and amortization           0.02       0.02      0.07       0.03
Stock based compensation                0.01       0.01      0.01       0.01
                                   ---------  --------- ---------  ---------
EBITDA (as adjusted), per diluted
 share (1)                         $   (0.01) $    0.05 $   (0.19) $    0.07
                                   =========  ========= =========  =========

(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.


                                                        Six Months Ended
                                                            June 30,
Reconciliation of EBITDA (as adjusted)
to cash flows provided by operating activities (1)     2014         2013
                                                   ------------ ------------

EBITDA (as adjusted)                                    $ (823)        $ 303
Interest expense                                           (29)         (32)
Income tax expense                                         (21)         (46)
Gain (loss) on sale of marketable securities                (2)            2
Loss on disposal of property and equipment                   11            -
Bond amortization                                           (3)            6
Net change in operating assets and liabilities            1,350        1,226
                                                   ------------ ------------
Cash flows provided by operating activities               $ 483      $ 1,459
                                                   ============ ============



                         Orbit International Corp.
                        Consolidated Balance Sheets

                                               June 30, 2014  December 31,
                                                (unaudited)        2013
                                               -------------  -------------
ASSETS
Current assets:
  Cash and cash equivalents                    $   2,672,000  $   2,562,000
  Investments in marketable securities               252,000        243,000
  Accounts receivable, less allowance for
   doubtful accounts                               2,402,000      2,981,000
  Inventories                                     11,188,000     11,803,000
  Other current assets                               218,000        264,000
                                               -------------  -------------

    Total current assets                          16,732,000     17,853,000

Property and equipment, net                          724,000        975,000
Goodwill                                             868,000        868,000
Other assets                                          40,000         35,000
                                               -------------  -------------

    Total assets                               $  18,364,000  $  19,731,000
                                               =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Note payable-bank                                        -      2,100,000
  Accounts payable                                   523,000        510,000
  Liability associated with non-renewal of
   senior
  officer contract                                    20,000         36,000
  Accrued expenses                                 1,075,000      1,149,000
  Income tax payable                                  13,000         25,000
  Customer advances                                  177,000         17,000
                                               -------------  -------------

    Total current liabilities                      1,808,000      3,837,000

Note payable-bank                                  1,885,000              -
Liability associated with non-renewal of
 senior officer contract, net of current
 portion                                                   -          4,000
Other liabilities                                     48,000              -
                                               -------------  -------------

    Total liabilities                              3,741,000      3,841,000

Stockholders' Equity
  Common stock                                       522,000        523,000
  Additional paid-in capital                      22,877,000     22,824,000
  Treasury stock                                  (2,225,000)    (2,133,000)
  Accumulated other comprehensive gain (loss)          1,000         (5,000)
  Accumulated deficit                             (6,552,000)    (5,319,000)
                                               -------------  -------------

    Stockholders' equity                          14,623,000     15,890,000
                                               -------------  -------------

    Total liabilities and stockholders' equity $  18,364,000  $  19,731,000
                                               =============  =============

CONTACT
Mitchell Binder
President & Chief Executive Officer
631-435-8300

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business. Though, IoT is far more complex than most firms expected with a majority of IoT projects having failed. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, Chief IoTologist at Wipro, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology portfolios and business models to adopt and leverage IoT. He will delve in...
In the enterprise today, connected IoT devices are everywhere – both inside and outside corporate environments. The need to identify, manage, control and secure a quickly growing web of connections and outside devices is making the already challenging task of security even more important, and onerous. In his session at @ThingsExpo, Rich Boyer, CISO and Chief Architect for Security at NTT i3, will discuss new ways of thinking and the approaches needed to address the emerging challenges of securit...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
As cloud adoption continues to transform business, today's global enterprises are challenged with managing a growing amount of information living outside of the data center. The rapid adoption of IoT and increasingly mobile workforce are exacerbating the problem. Ensuring secure data sharing and efficient backup poses capacity and bandwidth considerations as well as policy and regulatory compliance issues.
In his session at 20th Cloud Expo, Chris Carter, CEO of Approyo, will discuss the basic set up and solution for an SAP solution in the cloud and what it means to the viability of your company. Chris Carter is CEO of Approyo. He works with business around the globe, to assist them in their journey to the usage of Big Data in the forms of Hadoop (Cloudera and Hortonwork's) and SAP HANA. At Approyo, we support firms who are looking for knowledge to grow through current business process, where even...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions with...
Cloud Expo, Inc. has announced today that Andi Mann and Aruna Ravichandran have been named Co-Chairs of @DevOpsSummit at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change the...
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.