ORBIT INTERNATIONAL CORP. REPORTS 2021 YEAR END RESULTS
COMPANY RECOMMENCES ITS QUARTERLY CASH DIVIDEND PAYMENT AND ANNOUNCES CASH DIVIDEND OF $0.01 PER COMMON SHARE
FOR THE FIRST QUARTER OF 2022
2021 Net Income of $3,246,000 ($0.93 per diluted share) v. $641,000 ($0.18 per diluted share) in Prior Year Period
2021 EBITDA, As Adjusted, of $3,499,000 ($1.01 per diluted share) v. $921,000 ($0.26 per diluted share) in Prior Year Period
Exclusive of PPP Loan Forgiveness and Acquisition Costs Relating to the Panel Products Acquisition, 2021 Net Income was $1,991,000 ($0.57 per diluted share) and EBITDA, As Adjusted was $2,244,000 ($0.65 per diluted share)
Fourth Quarter 2021 Net Income of $204,000 ($0.06 per diluted share) v. $153,000 ($0.04 per diluted share) in Prior Year Period
Fourth Quarter 2021 EBITDA, As Adjusted, of $244,000 ($0.07 per diluted share) v. $236,000 ($0.07 per diluted share) in Prior Year Period
Exclusive of Acquisition Costs Relating to the Panel Products Acquisition, Fourth Quarter 2021 Net Income was $463,000 ($0.13 per diluted share) and EBITDA, As Adjusted was $503,000 ($0.15 per diluted share)
Hauppauge, New York, March 10, 2022 – Orbit International Corp. (OTC PINK:ORBT) today announced results for the fourth quarter and year ended December 31, 2021. The Company also announced today that its Board of Directors has authorized the Company to recommence its quarterly cash dividend payments. The Board also declared a cash dividend of $0.01, payable on April 7, 2022, to shareholders of record as of March 31, 2022.
Fourth Quarter 2021 vs. Fourth Quarter 2020
- Net sales were $4,956,000, as compared to $6,420,000.
- Gross margin was 39.9%, as compared to 27.5%.
- Net income was $204,000 ($0.06 per diluted share), as compared to a net income of $153,000 ($0.04 per diluted share). Net income for the current year quarter includes acquisition costs of $259,000 ($0.08 per diluted share).
- Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was $244,000 ($0.07 per diluted share), as compared to $236,000 ($0.07 per diluted share).
Full Year 2021 vs. Full Year 2020
- Net sales were $22,217,000, as compared to $25,924,000.
- Gross margin was 36.8%, as compared to 27.4%.
- Net income was $3,246,000 ($0.93 per diluted share), as compared to net income of $641,000 ($0.18 per diluted share). Net income for the current year includes a benefit for PPP loan forgiveness of $1,618,000 ($0.47 per diluted share) and acquisition costs of $363,000 ($0.10 per diluted share).
- Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was $3,499,000 ($1.01 per diluted share), as compared to $921,000 ($0.26 per diluted share).
- Backlog at December 31, 2021 was $14.4 million as compared to $16.3 million at September 30, 2021 and $17.9 at December 31, 2020. Backlog at December 31, 2021, when including the $3.5 million acquired backlog of Simulator Products Solutions LLC, was $17.9 million.
Mitchell Binder, President and CEO of Orbit International Corp. commented, “I am pleased to report that our fourth quarter performance completed a successful year for our Company. Our net income for the year ended December 31, 2021, was $3,246,000 compared to $641,000 for the prior comparable period. Included in our current period results was $1,618,000 representing the forgiveness of our loan, including accrued interest, from Peoples United Bank under the Paycheck Protection Program (“PPP”) and $363,000 of one-time acquisition costs related to the acquisition of Panel Products Inc. (through a newly formed subsidiary, Simulator Product Solutions LLC (“SPS”)) which was completed on January 3, 2022. Exclusive of the PPP loan forgiveness and the one-time acquisition costs, our net income for the year was $1,991,000. Our EBITDA, as adjusted, for the year ended December 31, 2021, exclusive of the PPP loan forgiveness and one-time acquisition costs was $2,244,000 ($0.65 per diluted share) compared to $921,000 ($0.26 per diluted share) in the prior comparable period. Please note that our financial results for the fourth quarter and year ended December 31, 2021 do not include the results of SPS. We will start incorporating SPS’ financial results beginning with the first quarter of 2022.”
Mr. Binder added, “Our net income for the three-month period ended December 31, 2021, was $204,000 compared to $153,000 in the prior comparable period. Included in the current fourth quarter results was $259,000 of one-time acquisition costs related to the SPS acquisition. Exclusive of the one-time acquisition costs, net income for the three months ended December 31, 2021, was $463,000. Our EBITDA, as adjusted, for the three months ended December 31, 2021, exclusive of the one-time related acquisition costs, was $503,000 ($0.15 per diluted share) compared to $236,000 ($0.07 per diluted share) in the prior comparable period.
Mr. Binder added, “Our sales for the three months ended December 31, 2021, decreased to $4,956,000 compared to $6,420,000 from the prior comparable period. This decrease in sales was primarily attributable to a decrease in sales from our Orbit Power Group (“OPG”) due to the shipment of approximately $1,535,000 of lower margin CAATS shipments that were made in the prior period. The shipment of CAATS units made during the first quarter of 2021 completed the contract that had been received by our OPG in September 2017. Sales from our Orbit Electronics Group (“OEG”) for the three months ended December 31, 2021, also slightly decreased from the prior comparable period.”
Mr. Binder further added, “Our gross margin for the three months ended December 31, 2021, increased to 39.9% compared to 27.5% in the prior comparable period. This increase reflects a higher gross profit from both our OEG and OPG. The increase in gross margin during this quarter by our OEG was attributable to revenues from certain engineering deliverables whose associated costs were expensed in both this quarter and in prior periods, as well as a more profitable product mix from both operating segments. Our improved gross margin at our OPG should continue due to the completion of the lower gross margin CAATS contract which has been replaced by the higher gross margin shipments of our VPX power supplies and other COTS products. Selling, general and administrative expenses for the fourth quarter did not materially change from the prior year. Although our OEG selling expenses increased due to the recommencement of trade shows and other selling costs, these expenses were more than offset by decreased selling, general and administrative costs from our OPG.”
Mr. Binder continued, “Our backlog at December 31, 2021, was approximately $14,400,000 compared to approximately $17,879,000 at December 31, 2020. The reduction in backlog reflected a lower backlog at both of our operating segments. However, our backlog at December 31, 2021, when including the $3,477,000 acquired backlog of SPS, was $17,900,000. The reduction in backlog was expected as some follow-on orders were pushed back by our customers into 2022, due primarily to funding delays from the U.S. government. Our OPG continues to book new orders for its VPX power supplies and is experiencing an increase in orders thus far in 2022 for its commercial division, which had been adversely affected by the pandemic. We believe VPX opportunities will be the driver of future revenue growth for our OPG as we continue to receive orders to support customer prototype opportunities, which may lead to production orders in 2022.”
David Goldman, Chief Financial Officer, noted, “At December 31, 2021, our cash and cash equivalents aggregated approximately $9.2 million and our financial condition continued to remain strong as evidenced by our 7.2 to 1 current ratio. Our tangible book value per share at December 31, 2021 was $5.62 which compares to $5.56 at September 30, 2021 and $4.70 at December 31, 2020. (Note: tangible book value per share does not include any additional value for our remaining reserved deferred tax asset). To offset future federal and state taxes resulting from profits, we have approximately $6.4 million and $0.6 million in available federal and New York State net operating loss carryforwards, respectively.”
Mr. Binder concluded, “Because our revenues are tied to our delivery schedules specified in our contracts, it is often difficult to judge our performance on a quarterly basis. As previously mentioned, we completed a firm year of operating results due to improved gross margins, and also as a result of tight controls on our overall operating costs. During the second quarter of 2021, based on the stability of our financial condition and on our improved business outlook as the effect of the COVID-19 pandemic lessened, our Board of Directors authorized the Company to recommence our share repurchase program. Through March 8, 2022, we have purchased approximately 64,550 shares under the program. In addition, as previously mentioned, as a result of our 2021 financial performance and our financial condition, our Board of Directors has now also authorized the recommencement of our quarterly dividend program. We remain confident in our operating performance of our legacy businesses as we move into 2022, although supply chain issues remain a concern and could impact the timing of deliveries in 2022. Our operating team continues to work on potential solutions whenever receipt of components are delayed. However, with the addition of SPS, we remain confident that our operating results should further improve in the coming year.”
In January 2022, Orbit announced that its newly formed subsidiary, SPS, had completed its previously announced acquisition of the assets and business of Panel Products, Inc. (“Panel”), a Carson, CA based company founded by Nabil Radi in 1999. The transaction valued Panel at approximately $6,500,000, subject to adjustment, with $4,000,000 of the purchase price paid in cash at closing, an aggregate of up to $1,200,000 in performance related payments payable at the end of 2022 and 2023, and the issuance to Panel of a 19.9% ownership interest in SPS.
Orbit International Corp., through its Electronics Group, 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, VME/VPX power supplies as well as various COTS power sources.
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.
Chief Financial Officer