Third Quarter Net Income $314,000 ($.07 per share) v. Loss of $115,000 in Prior Year Quarter ($.03 loss per share)
Company Repurchases 86,380 Shares During Third Quarter
Line of Credit Extended through August 2017
Hauppauge, New York, November 5, 2015 – Orbit International Corp. (PINKSHEETS:ORBT) today announced results for the third quarter and nine months ended September 30, 2015.
Third Quarter 2015 vs. Third Quarter 2014
- Net sales were $5,217,000, as compared to $4,800,000.
- Gross margin was 37.5%, as compared to 36.7%.
- Net income was $314,000 ($0.07 earnings per share), as compared to a net loss of $115,000 ($0.03 loss per share).
- Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $372,000 ($0.09 earnings per share), as compared to a loss of $31,000 ($0.01 loss per share).
Nine Months 2015 vs. Nine Months 2014
- Net sales were $14,612,000, as compared to $15,203,000.
- Gross margin was 36.7%, as compared to 36.2%.
- Net income was $319,000 ($0.07 earnings per share), as compared to a net loss of $1,348,000 ($0.31 loss per share).
- Net loss for the 2014 nine month period includes $1,087,000 of costs associated with the consolidation of our Quakertown, PA facility into our Hauppauge, NY facility. Exclusive of these costs, net loss for the 2014 nine month period was $261,000 ($0.06 loss per share).
- Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $598,000 ($0.14 earnings per share), as compared to a loss of $854,000 ($0.19 loss per share).
- Backlog at September 30, 2015 was $10.3 million as compared to $13.2 million at June 30, 2015 and $9.8 million at September 30, 2014.
Mitchell Binder, President & Chief Executive Officer, stated, “Our results for the third quarter once again benefitted from the significant cost cutting that we implemented over the past two years. Our revenue for the third quarter increased by 8.7% over the prior year comparable quarter and our profitability increased due to improved operating margins. In particular, our selling, general and administrative expenses for the third quarter and nine months ended September 30, 2015 decreased by 11.7% and 26.3%, respectively, as compared to the prior year comparable periods.”
Mr. Binder added, “During the third quarter of 2015, both our Electronics and Power Groups contributed to the profitability of the Company. Based on our delivery schedules, we expect our fourth quarter to slightly exceed third quarter revenue levels. Our backlog at 9/30/15 was $10.3 million v. $9.8 million at 9/30/14, a 4.8% increase year over year but a 13.8% decrease from the $12.0 million backlog at year end. The decrease in our backlog from year-end is primarily attributable to a lower backlog at our Power Group due to a decrease in bookings related to oil and gas activity and a weaker capital spending environment.”
David Goldman, Chief Financial Officer, noted, “Our financial condition remains strong. At September 30, 2015, total current assets were approximately $15.7 million versus total current liabilities of approximately $1.6 million for a 9.7 to 1 current ratio. Cash, cash equivalents and marketable securities as of September 30, 2015, aggregated approximately $509,000. To offset future federal and state taxes resulting from profits, we have approximately $10 million and $4 million in available federal and New York State net operating loss carryforwards, respectively, which should enhance future cash flow.”
Mr. Goldman added, “During the quarter, we continued to pay down our debt. Our tangible book value at September 30, 2015 was $2.96 as compared to $2.89 at both June 30, 2015 and December 31, 2014 (this does not include any value for the potential deferred tax asset from our operating loss carryforwards that could offset future taxable income). During the third quarter, we purchased 86,380 shares (approximately $264,000) of which 86,000 shares were retired; and since January 1, 2012, we have repurchased in excess of 459,000 shares of our stock in the marketplace at an average price of $3.41 per share.”
Mr. Goldman concluded, “In October 2015, we amended our Credit Agreement with our primary lender whereby the maturity date for our $4 million committed line of credit was extended to August 1, 2017. We were in compliance with our financial covenants at September 30, 2015.”
Mr. Binder concluded, “We are benefiting from the restructuring of our business that we began in 2013 and we continue to examine our costs for additional savings. Our challenge remains to increase revenue in a difficult business environment, thereby taking advantage of our operating leverage. Our Power Group is securing several alliances with large prime contractors on certain platforms that could potentially utilize its new VPX technology. The Company has developed several new versions of its VPX power supplies and expects several small prototype orders over the next few months that could develop into substantial production awards.”
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. 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 Newbury Park, CA and a facility in Louisville, KY dedicated to the design and manufacture of gun weapons systems as well as VME/VPX solutions including backplanes, health monitors, air transport racks and components.
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 as well as Orbit’s prior 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.
President & Chief Executive Officer