ORBIT INTERNATIONAL CORP. RECEIVES $1.6 MILLION LOAN UNDER PAYCHECK PROTECTION PROGRAM PROVISION OF CARES ACT
COMPANY TO SUSPEND QUARTERLY CASH DIVIDEND PAYMENT
Hauppauge, New York, May 5, 2020– Orbit International Corp. (OTC PINK:ORBT) (“Orbit”), an electronics manufacturer and software solution provider, today announced that it closed on a $1,606,000 loan (“Loan”) from Peoples United Bank under the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief and Economic Security Act (“the CARES Act”). The Loan is evidenced by a promissory note (“Note”), bears interest at 1.00% per annum with the first six months of interest deferred from the date of the Note, has an initial term of two years from the date of the Note, may be prepaid at any time and is unsecured and guaranteed by the Small Business Administration. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of such loans based on the use of such loan proceeds for payment of payroll costs, mortgage interest, rent and utilities.
The Company also announced that its Board of Directors has decided to suspend the Company’s $0.01 quarterly cash dividend due to the economic uncertainty of the pandemic. Previously, on April 21, 2020, the Company announced that its Board of Directors had decided to suspend its share repurchase program.
Mitchell Binder, President and CEO of Orbit International Corp. commented, “Since late March, when the Governor of New York State issued the PAUSE executive order, we have kept our manufacturing facility operational while safeguarding the health and safety of our employees. We instituted a dual six-hour shift for our manufacturing employees and directed most of our salaried employees to work from home. As a result, productivity has been adversely affected throughout our organization and we continue to deal with issues from our supply chain which have impacted customer deliveries. Furthermore, both bookings and revenue have been impacted, particularly from our Power Group’s commercial division whose customer base has been especially hurt by the pandemic. In addition, Orbit’s subsidiary, Q-Vio Corp., has found that most of its commercial and industrial opportunities have been delayed indefinitely. However, despite all the inefficiencies and sales uncertainty this pandemic has created, this loan will allow us to maintain full employment.”
Binder added, “It is currently very difficult to assess the full extent of the pandemic’s short and long-term financial impact on our business. With the receipt of the PPP loan, we are confident that once some sense of normalcy returns, our efficiencies will be restored, our operating performance will improve and we are hopeful our quarterly dividend can then be restored as well. In the meantime, we are grateful that we have the ability to best protect our employees from many of the challenges of this pandemic.”
Orbit International Corp., through its Electronics Group including its new Q-Vio subsidiary, 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, uninterruptible power supplies, VME/VPX power supplies as well as various COTS power sources. The Company also has a sales office in Bradenton, FL.
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 is classified as an essential business by New York State and therefore is exempt from the state’s mandate that all non-essential business 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 working its normal schedule. The Company’s customers and direct suppliers, as members of the DIB, share this same responsibility to remain open, although some of the Company’s indirect suppliers may not be members of the DIB. The Company remains open while following guidance from the Centers for Disease Control (“CDC”) to best protect our employees.
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.
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Chief Financial Officer