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
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, will discuss how research has demonstrated the value of Machine Learning in delivering next generation analytics to im...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
This is not a small hotel event. It is also not a big vendor party where politicians and entertainers are more important than real content. This is Cloud Expo, the world's longest-running conference and exhibition focused on Cloud Computing and all that it entails. If you want serious presentations and valuable insight about Cloud Computing for three straight days, then register now for Cloud Expo.
IoT device adoption is growing at staggering rates, and with it comes opportunity for developers to meet consumer demand for an ever more connected world. Wireless communication is the key part of the encompassing components of any IoT device. Wireless connectivity enhances the device utility at the expense of ease of use and deployment challenges. Since connectivity is fundamental for IoT device development, engineers must understand how to overcome the hurdles inherent in incorporating multipl...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...