First Quarter Net Income $35,000 ($.01 per share) v. Loss of $326,000 in Prior Year Quarter ($.07 loss per share)
Backlog at 3/31/16 up 38% from Year-End
Board of Directors Authorizes New Share Repurchase Program
Hauppauge, New York, May 5, 2016 – Orbit International Corp. (OTC PINK:ORBT) today announced results for the first quarter ended March 31, 2016.
First Quarter 2016 vs. First Quarter 2015
- Net sales were $4,801,000, as compared to $4,214,000.
- Gross margin was 36.4%, as compared to 32.8%.
- Net income was $35,000 ($0.01 per diluted share), as compared to a net loss of $326,000 ($0.07 loss per share).
- Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $112,000 ($0.03 per diluted share), as compared to a loss of $215,000 ($0.05 loss per share).
- Backlog at March 31, 2016 was $15.4 million compared to $13.9 million at March 31, 2015. Backlog at December 31, 2015 was $11.1 million.
Mitchell Binder, President & Chief Executive Officer, stated, “Our operating results for the current quarter marks the first time since 2011 that the Company has recorded a profitable first quarter and reflects the improving operating performance of our Electronics Group. Similar to our prior year operating trend, we expect our revenue levels to increase in the remaining quarters of 2016, which will lead to improved operating performance.”
Mr. Binder added, “Our backlog at 3/31/16 was $15.4 million compared to $11.1 million at 12/31/15, a 38.1% increase. Our Electronics Group has gotten off to a strong start to 2016 with the receipt of several significant contracts that were previously announced during the first quarter. The cumulation of these awards pushed our consolidated bookings for our Electronics and Power Groups to over $9,000,000 for the first quarter. Consequently, we expect revenue levels will improve as delivery schedules are met from our increased backlog. With the operating leverage inherent in our business, we expect operating margins to improve in the coming quarters.”
Mr. Binder continued, “We are encouraged by our bid and proposal pipeline for follow-on opportunities for both our Electronics and Power Groups. In addition to the high level of awards received in the first quarter, our Electronics Group is currently working with our customers on several additional follow-on contracts, some of which we expect to receive in the current second quarter of 2016. Our Power Group experienced relatively weak bookings in the first quarter but has noted an increase in its bid pipeline for its commercial products. We also continue to establish new alliances for our VPX technology and have both received and continue to bid on new pre-production awards with significant sales projected once full production is attained. However, the timing of actual awards is always an uncertainty.”
David Goldman, Chief Financial Officer, noted, “Our financial condition remains strong. At March 31, 2016, total current assets were approximately $16.3 million versus total current liabilities of approximately $1.9 million for a 8.7 to 1 current ratio. Cash, cash equivalents and marketable securities as of March 31, 2016, aggregated approximately $2.3 million. To offset future federal and state taxes resulting from profits, we have approximately $10 million and $3 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 paid down $130,000 of our debt which brought the balance owed under our line of credit to $1.28 million at March 31, 2016. In addition, we were in compliance with our financial covenants at March 31, 2016. Our tangible book value at March 31, 2016 was $3.11 as compared to $3.10 at December 31, 2015 and $2.82 at March 31, 2015 (this does not include any value for the potential deferred tax asset from our operating loss carryforwards that could offset future taxable income). ”
Mr. Goldman concluded, “Since January 1, 2012, we have repurchased in excess of 493,000 shares of our stock in the marketplace (including 22,890 shares purchased in the first quarter) at an average price of $3.41 per share. Due to our improved operating performance and outlook for the remainder of the current fiscal year, our Board of Directors has authorized a new share repurchase program whereby management is authorized to buy up to $275,000 of its common stock in the marketplace through June 30, 2016. In addition, the Board has also authorized management to purchase up to $400,000 of its common stock during the period July 1, 2016 through June 30, 2017. These purchases would be in compliance with the credit agreement with our commercial lender.”
Mr. Binder concluded, “After a nice turnaround in financial performance in 2015, our outlook for 2016 is encouraging, particularly with $9,000,000 in bookings in the first quarter. We are now benefiting from the restructuring of our business that we began back in 2013 as our margins have improved. Our goal remains to drive our revenue levels higher to take advantage of our operating leverage and to continue to work with our existing customers on new technology which we hope will secure us with next generation products that could secure us on new critical programs.”
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