First Quarter 2017 Net Income of $313,000 ($.08 per diluted share) v. Net Income of $35,000 ($.01 per diluted share) in Prior Period
Company Repurchases 187,247 of its common shares in 2017 YTD
Board Authorizes New $400,000 Repurchase Plan of Common Stock
Hauppauge, New York, May 11, 2017 – Orbit International Corp. (OTC PINK:ORBT) today announced results for the first quarter ended March 31, 2017.
First Quarter 2017 vs. First Quarter 2016
- Net sales were $5,207,000, as compared to $4,801,000.
- Gross margin was 38.7%, as compared to 36.4%.
- Net income was $313,000 ($0.08 per diluted share), as compared to a net income of $35,000 ($0.01 per diluted share).
- Earnings before interest, taxes, depreciation and amortization and stock based compensation (EBITDA, as adjusted) was $370,000 ($0.09 per diluted share), as compared to income of $112,000 ($0.03 per diluted share).
- Backlog at March 31, 2017 was $12.4 million compared to $15.4 million at March 31, 2016. Backlog at December 31, 2016 was $13.0 million.
Mitchell Binder, President and CEO of Orbit International Corp. commented, “Our operating results significantly improved from the comparable prior year period and reflected both an increase in revenue and the continued tight management of our operating costs. The increase in revenue was due primarily to higher sales from our Electronics Group due to delivery schedules resulting from a strong year of bookings in 2016.”
Mr. Binder added, “Our gross profit for the first quarter was 38.7% compared to gross profit of 36.4% from the comparable period of the prior year. Our higher gross profit was attributable to higher revenues and product mix from our Electronics Group which was partially offset by a lower gross profit from our Power Group, primarily attributable to lower sales. We continue to tightly manage our selling, general and administrative costs but are taking steps to drive our bid pipeline and revenues higher, which will lead to slightly higher selling costs in the future.”
Mr. Binder continued, “Our backlog at March 31, 2017 was $12,426,000 compared to $13,017,000 at December 31, 2016. However, our backlog at March 31, 2017 includes only $805,000 for a letter subcontract received by our Electronics Group from a prime contractor for displays on a major aviation program; but does not include approximately $1,400,000 of the expected $2,200,000 related purchase order. The temporary delay in receiving the final purchase order allows negotiations on the contract to continue while delivery schedules are maintained. Had the total purchase order been placed, backlog would have been approximately $13,826,000 at March 31, 2017, an increase of approximately 6% compared to year end. We expect this order to be placed no later than early in the third quarter and deliveries to commence in the fourth quarter. Furthermore, our Electronics Group continues to have a firm bid pipeline including a recently announced new developmental award for a next generation product that could lead to new follow-on production awards in the future as well as significant replacement potential.”
Mr. Binder added, “We are encouraged by an increase in bookings and backlog from the prior comparable period by our Power Group, which has been adversely affected by weakness in the oil and gas sector and test and measurement business. However, there continues to be demand for prototype opportunities for our VPX products and we continue to make strategic alliances with several prime contractors utilizing our technology. We are hopeful that the value of orders for these VPX products will steadily increase as programs move to the production stage. In addition, our Power Group is expecting a significant follow-on order for one of its COTS power supplies during the second quarter of 2017.”
David Goldman, Chief Financial Officer, noted, “Our financial condition continues to be strong. At March 31, 2017, total current assets were approximately $15.4 million versus total current liabilities of approximately $2.0 million for a 7.5 to 1 current ratio. Cash, cash equivalents and marketable securities as of March 31, 2017, aggregated approximately $2.1 million. We currently have no outstanding debt and during the quarter, we expended approximately $730,000 on purchases of our common stock. To offset future federal and state taxes resulting from profits, we have approximately $10 million and $0.7 million in available federal and New York State net operating loss carryforwards, respectively, which should enhance future cash flow.”
Mr. Goldman concluded, “Our tangible book value at March 31, 2017 was $3.49 as compared to $3.42 at December 31, 2016 and $3.11 at March 31, 2016 (Note tangible book value does not include any additional value for the remaining reserved deferred tax asset).”
Mr. Binder concluded, “After completing a very successful year in 2016 in terms of operating performance and cash flow, we have gotten off to a strong start in 2017. Our goal is to continue to drive our revenue to maximize our operating leverage. We currently have no bank debt and we purchased an additional 187,247 shares of our stock since January 1, 2017. Both of our business segments are actively pursuing new and follow-on opportunities in the military marketplace and we currently have an administration in Washington D.C. that appears committed to increase defense spending. As a result of our continued confidence in our business outlook, our Board of Directors has authorized management to purchase up to an additional $400,000 of our common stock.”
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 Thousand Oaks, CA and a facility in Louisville, KY dedicated to the design and manufacture of gun weapons systems.
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