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| ORBT > SEC Filings for ORBT > Form 8-K on 10-Mar-2009 | All Recent SEC Filings |
10-Mar-2009
Results of Operations and Financial Condition, Regulation FD Disclosure
On March 9, 2009, Orbit International Corp. ("Orbit") issued a press release announcing its operating results for its fourth quarter and year ended December 31, 2008. The press release contains a non-GAAP disclosure-Earnings before interest, taxes, depreciation and amortization, and stock based compensation (EBITDA, as adjusted), that management feels provides useful information in understanding the impact of certain items to Orbit's financial statements. Orbit's press release is furnished below.
On March 9, 2009, during the Company's investor conference call, the Company stated that it expects to receive new orders for its ICS subsidiary, valued at approximately $4.5 million, either at the end of the first quarter of 2009 or the beginning of the second quarter of 2009. The Company also stated that it expects to receive in the near future approximately $1 million in additional orders for its Tulip subsidiary.
FOR IMMEDIATE RELEASE
---------------------
CONTACT or Investor Relations Counsel
-------
Mitchell Binder Lena Cati, 212-836-9611
Executive Vice President Linda Latman, 212-836-9609
631-435-8300 The Equity Group Inc.
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FOURTH QUARTER 2008 NET SALES INCREASED 10% COMPARED TO THE SAME PERIOD OF LAST
Hauppauge, New York, March 9, 2009 - Orbit International Corp. (NASDAQ:ORBT), an electronics manufacturer, systems integrator and software solution provider, today announced results for the fourth quarter and year ended December 31, 2008. The results of operations in the current periods include Integrated Combat Systems ("ICS") which was acquired by Orbit, effective December 31, 2007.
FOURTH QUARTER 2008VS. FOURTH QUARTER 2007
- Net sales increased by 10.2% to $7,930,000 compared to $7,199,000;
- Gross margin was 48.6% compared to 43.5%;
- Prior to a one-time non-cash goodwill impairment charge of $6,889,000 and
a $130,000 other than temporary impairment loss in our corporate bond portfolio,
net income was $1,092,000 or $.24 per diluted share compared to $1,029,000 or
$.22 per diluted share (prior to a $50,000 other than temporary impairment
loss);
- Net loss after one-time goodwill impairment charge was $5,927,000 or $1.34
loss per share compared to net income of $979,000 or $.21 per diluted share;
and,
- Earnings before interest, taxes, depreciation and amortization, and stock
based compensation (EBITDA, as adjusted) was $1,330,000 ($.30 per diluted share)
compared to $1,246,000 ($.26 per diluted share).
YEAR END 2008VS. YEAR END 2007
- Net sales increased by 5.7% to $27,364,000 from $25,885,000;
- Gross margin was 42.2% compared to 43.4%;
- Prior to the aforementioned goodwill impairment charge in the current
period and other than temporary impairment loss recorded in both 2008 and 2007,
net income was $1,012,000 or $.22 per diluted share compared to $2,632,000 or
$.56 per diluted share; inclusive of the goodwill impairment, there was a net
loss of $6,007,000 in 2008;
- EBITDA, as adjusted, decreased to $2,320,000 ($.50 per diluted share)
compared to $3,685,000 ($.79 per diluted share); and,
- Backlog at December 31, 2008 was $15.8 million, up 11.0% from $14.2
million at September 30, 2008 and up 9% from December 31, 2007.
(more)
Orbit International News Release Page 2 March 9, 2009
Dennis Sunshine, President and Chief Executive Officer stated, "We ended the year on a positive note in terms of net sales, gross margins and operating profits, and entered 2009 with strong levels of backlog. With the release of certain orders whose shipments were placed on hold and delayed by our customer from earlier quarters, we were able to offset an $80,000 loss through the first nine months, and finish the year with a strong operating quarter (exclusive of non-cash charges). Most notably, EBITDA, as adjusted, for the fourth quarter was approximately $1,330,000 compared to $990,000 for the first nine months of the year. As expected, and stated in prior press releases, the second half of the year was stronger than the first half."
Discussing the outlook for 2009 Sunshine noted, "Based upon backlog levels and current delivery schedules, we expect an improved operating performance in 2009. Several of the design and prototype program opportunities supporting prime contractors are scheduled to enter full production in 2009, providing substantial recurring revenue potential for Orbit. The $2 million Black Hawk helicopter retrofit and display upgrade production award received by our Electronics Group in December 2008 clearly demonstrates how the design and prototype phase of a program will transition into full production requirements, once all qualification testing is completed on the prototype units. Similarly, the design and qualification award for the CH-53E Sea Stallion helicopter upgrade program which was received in January 2009 is currently scheduled for completion of qualification testing by the second quarter of 2009, and should transition into its production phase, with $3 million in potential display orders before year-end. As a result, we are currently negotiating a lease for a significantly larger operating facility for our Tulip subsidiary to accommodate both these increased production requirements, as well as other significant contract awards that are currently in the qualification testing phase."
Sunshine added, "Our earnings for the quarter were positively affected by the resumption of shipments of Remote Control Units (RCU) that had previously been placed on hold while we completed an enhanced hardware solution imposed as an additional contract requirement by our customer. Shipment delays of RCUs had adversely impacted the first and second quarters of 2008. In addition to resumed shipments, in December 2008, we received a follow on production award of approximately $1.4 million, which included our enhanced RCU solutions. Deliveries of the RCUs under this new production order commenced and shipments should be completed by mid-2009. RCUs remain an important revenue generator for our Company. Our customer, a leading global prime contractor has recently completed a forward looking program production review and has indicated that our Company can expect to receive additional production orders after we complete our existing Long Term Agreement (LTA). Our Company is currently engaged in direct negotiations with our customer for a new LTA, which includes projections of RCU requirements that could generate revenues in the range of $4.5 million to $9.0 million through 2012. Clearly, this Identification Friend or Foe (IFF) is a highly visible, critical program, because it directly supports land, sea and air communications for troops. To date, our Company has successfully shipped in excess of 4,000 RCUs that are fully deployed for global combat operations.
"As we review the results of our Power Group, 2008 was a year of record bookings, revenue and backlog. Behlman Electronics achieved record bookings for the second consecutive year and now has a significant backlog of commercial and industrial orders, several of which support the oil and gas industry, railroad requirements, nuclear power facilities, as well as a number of critical defense programs."
Mitchell Binder, Chief Financial Officer added, "After completing our impairment
testing of goodwill and other intangible assets pursuant to SFAS No. 142,
management concluded that an impairment charge should be taken in connection
with the recorded goodwill arising from our acquisitions made between 2005 and
2007. This goodwill charge, which has no impact on our normal business
operations, was also driven by adverse equity market conditions that caused a
significant decrease to our market capitalization."
Orbit International News Release Page 3 March 9, 2009
Binder, added, "Our financial condition remains strong. At December 31, 2008, total current assets were $22,124,000 versus total current liabilities of $4,988,000 for a 4.4 to 1 current ratio. With approximately $20 million and $7 million in federal and state net operating loss carryforwards, respectively, we should continue to shield profits from federal and New York State taxes and enhance future cash flow.
"Our cash and cash equivalents and marketable securities as of December 31, 2008 were in excess of $3 million having used approximately $1.7 million for the repayment of long-term debt and $529,000 to repurchase shares under our treasury stock repurchase program. From August 2008 through March 6, 2009, 250,199 common shares have been repurchased at an average price of $2.23 per share. There is approximately $2.45 million remaining available under our stock repurchase program. Finally, as a result of our net income, certain non-cash charges and stock repurchase program, our tangible book value at December 31, 2008 increased to $3.19 per share from $2.85 per share at December 31, 2007."
Sunshine concluded, "Our primary focus has always been to enhance shareholder value whenever management reviews potential business opportunities. We will attempt to minimize the impact of prolonged turbulent and volatile market conditions through aggressive marketing of our new and retrofit products while we continue to exercise strict cost management. Our Power Group continues to seek out opportunities in a number of specific markets that have been targeted by the current administration for increased government spending including infrastructure improvements and modernization programs. Our Electronics Group is well positioned to capture new business opportunities on several programs scheduled and funded for immediate retrofit of armored vehicles and avionic systems currently deployed in Iraq and Afghanistan. We continue to identify opportunities to secure business from new customers and at the same time support our strong existing customer base. Finally, we continue to explore a number of strategic and financial alternatives, including synergistic acquisitions, and/or the potential sale of the Company."
CONFERENCE CALL
The Company will hold a conference call for investors today, March 9, 2009, at
11:00 a.m. ET. Interested parties may participate in the call by dialing
706-679-3204; please call in 10 minutes before the conference call is scheduled
to begin and ask for the Orbit International conference call. After opening
remarks, there will be a question and answer period. The conference call will
also be broadcast live over the Internet. To listen to the live call, please go
to www.orbitintl.com and click on the Investor Relations section. Please go to
the website at least 15 minutes early to register, and download and install any
necessary audio software. If you are unable to listen live, the conference call
will be archived and can be accessed for approximately 90 days at Orbit's
website. We suggest listeners use Microsoft Explorer as their browser.
Orbit International Corp. is involved in the manufacture of customized electronic components and subsystems for military and nonmilitary government applications through its production facilities in Hauppauge, New York, and Quakertown, Pennsylvania; and designs and manufactures combat systems and gun weapons systems, provides system integration and integrated logistics support and documentation control at its facilities in Louisville, Kentucky. Its Behlman Electronics, Inc. subsidiary manufactures and sells high quality commercial power units, AC power sources, frequency converters, uninterruptible power supplies and associated analytical equipment. The Behlman military division designs, manufactures and sells power units and electronic products for measurement and display.
Orbit International News Release Page 4 March 9, 2009
Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company including, but not limited to, statements regarding any acquisition proposal and whether such proposal or a strategic alternative thereto may be considered or consummated; 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 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 and its registration statement on Form S-3 containing a final prospectus dated January 11, 2006. 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.
Orbit International News Release Page 5
March 9, 2009
ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
(unaudited) (unaudited) (audited)
2008 2007 2008 2007
----- ----- ---- -----
Net sales $7,930 $7,199 $27,364 $25,885
Cost of sales 4,075 4,064 15,805 14,659
----- ----- ------- ------
Gross profit 3,855 3,135 11,559 11,226
Selling general and administrative expenses 2,712 2,153 10,469 8,729
Goodwill impairment 6,889 - 6,889 -
Interest expense 81 74 342 332
Investment and other (income) expense 95 (76) (154) (447)
----- ------ ----- -----
Net (loss) income before taxes (5,922) 984 (5,987) 2,612
Income tax 5 5 20 30
----- ------ ------ ------
Net (loss) income $(5,927) $979 $(6,007) $2,582
====== ====== ======= ======
Basic (loss) earnings per share $ (1.34) $0.22 $(1.33) $0.59
====== ===== ===== ====
Diluted (loss) earnings per share $ (1.34) $0.21 $(1.33) $0.55
====== ===== ===== =====
Weighted average number of shares outstanding:
Basic 4,427 4,427 4,509 4,404
Diluted 4,427 4,706 4,509 4,680
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Orbit International News Release Page 6
March 9, 2009
ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2008 2007 2008 2007
----- ---- ----- -----
EBITDA Reconciliation (as adjusted)
-------------------------------------------------
Net (loss) income $(5,927) $ 979 $(6,007) $2,582
Interest expense 81 74 342 332
Tax expense 5 5 20 30
Depreciation and amortization 203 142 826 561
Goodwill impairment 6,889 - 6,889 -
Stock based compensation 79 46 250 180
----- ----- ------ -------
EBITDA (1) $1,330 $1,246 $2,320 $3,685
====== ====== ====== ======
Adjusted EBITDA Per Diluted Share Reconciliation
-------------------------------------------------
Net (loss) income $(1.32) $0.21 $(1.28) $ 0.55
Interest expense 0.02 0.01 0.07 0.07
Tax expense 0.00 0.00 0.01 0.01
Depreciation and amortization 0.05 0.03 0.18 0.12
Goodwill impairment 1.53 - 1.47 -
Stock based compensation 0.02 0.01 0.05 0.04
----- ----- ------ ------
EBITDA per diluted share (1) $0.30 $0.26 $ 0.50 $ 0.79
===== ===== ====== =======
(1) The EBITDA tables (as adjusted) presented are not determined in accordance
with accounting principles generally accepted in the United States of America.
Management uses adjusted EBITDA to evaluate the operating performance of its
business. It is also used, at times, by some investors, securities analysts and
others to evaluate companies and make informed business decisions. EBITDA is
also a useful indicator of the income generated to service debt. EBITDA (as
adjusted) is not a complete measure of an entity's profitability because it does
not include costs and expenses for interest, depreciation and amortization,
goodwill impairment, income taxes and stock based compensation. Adjusted EBITDA
as presented herein may not be comparable to similarly named measures reported
by other companies. The weighted average diluted shares used for the three
months and twelve months ended December 31, 2008 was 4,496,000 and 4,683,000,
respectively.
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YEAR ENDED
DECEMBER 31,
Reconciliation of EBITDA, as adjusted,
to cash flows from operating activities (1)
------------------------------------------- 2008 2007
----- -----
EBITDA (as adjusted) $ 2,320 $ 3,685
Interest expense (342) (332)
Tax expense (20) (30)
Bond amortization 18 14
Bad debt expense 0 6
Loss on disposal of assets 23 0
Write-down of marketable securities 130 50
Loss(gain) on sale of marketable securities 11 (15)
Deferred income (332) (85)
Net change in operating assets and liabilities (3,015) (1,816)
-------- --------
Cash flows from operating activities $ 1,207 $ 1,477
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Orbit International News Release Page 7
March 9, 2009
ORBIT INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2008 DECEMBER 31, 2007
-------------------- -----------------
ASSETS (UNAUDITED) (AUDITED)
Current assets
Cash and cash equivalents $ 2,080,000 $ 3,576,000
Investments in marketable securities 1,127,000 3,997,000
Accounts receivable, less allowance for doubtful accounts 6,333,000 4,561,000
Inventories 11,536,000 10,453,000
Costs and estimated earnings
in excess of billings on uncompleted contracts - 136,000
Deferred tax asset 850,000 1,025,000
Other current assets 198,000 331,000
-------------------- ------------
Total current assets 22,124,000 24,079,000
Property and equipment, net 655,000 691,000
Intangible assets, net 2,346,000 2,969,000
Goodwill 2,909,000 9,634,000
Deferred tax asset 1,322,000 1,678,000
Other assets 644,000 634,000
-------------------- ------------
Total assets $ 30,000,000 $39,685,000
==================== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term obligations $ 1,777,000 $ 1,777,000
Notes payable - bank 399,000 699,000
Accounts payable 1,499,000 1,384,000
Income taxes payable 6,000 162,000
Accrued expenses 1,185,000 1,395,000
Customer advances 37,000 163,000
Deferred income 85,000 332,000
-------------------- ------------
Total current liabilities 4,988,000 5,912,000
Deferred income 257,000 342,000
Deferred tax liability - 595,000
Long-term obligations 5,029,000 6,753,000
-------------------- ------------
Total liabilities 10,274,000 13,602,000
Stockholders' Equity
Common stock 477,000 472,000
Additional paid-in capital 21,032,000 20,766,000
Treasury Stock (529,000) -
Accumulated other comprehensive loss (125,000) (33,000)
Retained earnings(accumulated deficit) (1,129,000) 4,878,000
-------------------- ------------
Stockholders' equity 19,726,000 26,083,000
-------------------- ------------
Total liabilities and stockholders' equity $ 30,000,000 $39,685,000
==================== ============
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