EXHIBIT 99.1
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
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CONTACT or Investor Relations Counsel
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Mitchell Binder Linda Latman, 212-836-9609
Acting Chief Executive Officer Lena Cati, 212-836-9611
631-435-8300 The Equity Group Inc.
ORBIT INTERNATIONAL CORP. REPORTS 2010 FOURTH QUARTER
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AND YEAR-END RESULTS
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LOOKS FOR SIGNIFICANT IMPROVEMENT IN 2011 DUE TO 8.9% INCREASE IN BACKLOG AND
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LOWER COSTS
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Hauppauge, New York, March 10, 2011 -- Orbit International Corp. (NASDAQ:ORBT),
an electronics manufacturer and software solution provider, today announced
results for the fourth quarter and year ended December 31, 2010. The Company
noted that the results for the final quarter and year were adversely affected by
a non-recurring expense in connection with the non-renewal of the employment
contract of its former President and CEO ("senior officer expense") at 2010
year-end.
FOURTH QUARTER 2010VS. FOURTH QUARTER 2009
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- Net sales declined by 7.3% to $6,946,000 compared to $7,489,000;
- Gross margin declined to 32.6% from 42.3% due, in part, to 2010 inventory
write-downs and inventory disposals due to obsolescence;
- The net loss for the quarter was $3,028,000 ($0.66 loss per share)
compared to a net loss of $1,580,000 ($0.36 loss per share). The net loss for
the current period included a charge of $2,000,000 for the senior officer
expense (including a non-cash charge of $312,000 due to accelerated stock
vesting) and $924,000 of non-cash impairment charges taken in connection with
recorded intangible assets and goodwill related to its Integrated Combat
Systems, Inc. ("ICS") subsidiary. Excluding these charges, the net loss for the
quarter was $104,000; and,
- For the final quarter of 2009, there was a net loss of $1,580,000 or $0.36
per share which included $2,048,000 of non-cash impairment charges taken in
connection with recorded intangible assets and goodwill related to its ICS
subsidiary.
YEAR END 2010VS. YEAR END 2009
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- Net sales increased slightly to $26,749,000 from $26,518,000;
- Gross margin was 35.4% compared to 40.5%;
- The net loss for 2010 was $3,025,000 ($0.66 loss per share) compared to a
net loss of $1,607,000 ($0.37 loss per share). The net loss for the current
period included a charge of $2,000,000 for the senior officer expense (including
a non-cash charge of $312,000 due to accelerated stock vesting) and $924,000 of
non-cash impairment charges taken in connection with recorded intangible assets
and goodwill related to its ICS subsidiary. Excluding these charges, the net
loss for the year was $101,000; and,
- For 2009, there was a net loss of $1,607,000 or $0.37 per share which
included $2,048,000 of non-cash impairment charges taken in connection with
recorded intangible assets and goodwill related to its ICS subsidiary.
Mitchell Binder, Acting Chief Executive Officer stated, "We expect revenue and
profitability to improve in 2011 due to a number of factors:
- Backlog at December 31, 2010 was $20.1 million, up 8.9% from $18.4 million
at year-end 2009, which had been reduced by $2.1 million due to a cancelled
order. In addition, our ICS subsidiary booked a $1.1 million order for the
MK-437 in February 2011. The prior year's order for the MK-437 was already
reflected into our prior year-end backlog.
- Additionally, 2010 was a good year for bookings. Our Behlman division
booked $10.46 million in new orders, an 8.9% increase over 2009 and the Orbit
Instrument division exceeded $11 million in new orders. Similarly, ICS and
Tulip divisions also had a strong year of bookings.
- Favorable trends continued in 2011; for January and February of 2011,
bookings/orders aggregated approximately $4.9 million.
- Our cost structure in 2010 included compensation for our former CEO, whose
contact was not renewed at December 31, 2010. Without his compensation, our
operating expenses in 2011 will be considerably lower than in 2010.
- All goodwill and intangible assets of ICS have been entirely written off
as of December 31, 2010.
- In addition, we recently renegotiated the lease terms of our Hauppauge
facility resulting in an expense reduction of approximately $100,000 per year
effective January 1, 2011 through December 31, 2019.
- Because of the operating leverage inherent in our business, a modest
internal growth rate historically produces double digit bottom line
improvement."
Mr. Binder added, "We are focusing on growing our Company both organically and
through acquisitions. While pursuing new business opportunities, we continue to
harvest production orders and repeat business from what were once prototype
awards. To grow our business faster and to achieve better utilization at our
existing facilities, we are looking into synergistic acquisitions."
David Goldman, Acting Chief Financial Officer, noted, "Due to the loss during
the current fourth quarter and the liability associated with the senior officer
expense, the Company was not in compliance with one of its financial covenants
with its primary lender. The Company has met with its primary lender and is
currently seeking a waiver for the fourth quarter and an amendment to the
financial covenant for the first two quarters in 2011. The Company believes it
will obtain such waiver and amendment from its lender, but there is no assurance
that these will be obtained. In the event that the waiver and amendment are not
obtained, all long-term debt reflected in the Company's financial statements
would be reclassified to current liabilities. The Company expects to be back in
compliance with the original financial covenant by the third quarter."
Mr. Goldman added, "Our financial condition remains strong. At December 31,
2010, total current assets were $19,566,000 versus total current liabilities of
$4,560,000 for a 4.3 to 1 current ratio. Our cash, cash equivalents and
marketable securities as of December 31, 2010 were approximately $2.1 million.
To enhance future cash flow, we have approximately $22 million and $8 million in
federal and state net operating loss carryforwards, respectively, to shield
profits from federal and state taxes. Our tangible book value at December 31,
2010 decreased to $3.07 per share, compared to $3.45 per share at September 30,
2010, and $3.43 at December 31, 2009."
CONFERENCE CALL
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The Company will hold a conference call for investors today, March 10, 2011, at
2:00 p.m. ET. Interested parties may participate in the call by dialing
201-689-8037; 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.
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 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.
(See Accompanying Tables)
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)
2010 2009 2010 2009
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Net sales $ 6,946 $ 7,489 $26,749 $26,518
Cost of sales 4,679 4,319 17,273 15,790
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Gross profit 2,267 3,170 9,476 10,728
Selling, general and administrative expenses 2,368 2,697 9,614 10,248
Costs related to non-renewal of senior officer contract 2,000 - 2,000 -
Impairment of intangible assets 129 1,622 129 1,622
Goodwill impairment 795 426 795 426
Interest expense 53 67 225 208
Investment and other (income) expense (62) (51) (275) (208)
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Net loss before taxes (3,016) (1,591) (3,012) (1,568)
Income tax provision (benefit) 12 (11) 13 39
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Net loss $(3,028) $(1,580) $(3,025) $(1,607)
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Basic loss per share $ (0.66) $ (0.36) $ (0.66) $ (0.37)
Diluted loss per share $ (0.66) $ (0.36) $ (0.66) $ (0.37)
Weighted average number of shares outstanding:
Basic 4,616 4,339 4,563 4,365
Diluted 4,616 4,339 4,563 4,365
ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2010 2009 2010 2009
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EBITDA Reconciliation (as adjusted)
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Net loss $(3,028) $(1,580) $(3,025) $(1,607)
Interest expense 53 67 225 208
Tax (benefit) expense 12 (11) 13 39
Depreciation and amortization 76 201 376 739
Goodwill and intangible asset impairment 924 2,048 924 2,048
Stock based compensation 399 77 656 310
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EBITDA, as adjusted (1) $(1,564) $ 802 $ (831) $ 1,737
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Adjusted EBITDA Per Diluted Share Reconciliation
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Net loss $ (0.66) $ (0.36) $ (0.66) $ (0.37)
Interest expense 0.01 0.01 0.05 0.05
Tax (benefit) expense 0.00 (0.00) 0.00 0.01
Depreciation and amortization 0.02 0.05 0.08 0.17
Goodwill and intangible asset impairment 0.20 0.47 0.21 0.47
Stock based compensation 0.09 0.01 0.14 0.07
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EBITDA, as adjusted,
per diluted share (1) $ (0.34) $ 0.18 $ (0.18) $ 0.40
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<FN>
(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, 2010 was 4,616,000 and 4,563,000,
respectively; and for the three months and twelve months ended December 31, 2009 was 4,331,000
Reconciliation of EBITDA, as adjusted, YEAR ENDED
to cash flows from operating activities (1) DECEMBER 31,
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2010 2009
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EBITDA (as adjusted) $ (831) $1,737
Interest expense (225) (208)
Tax expense (13) (39)
Bond amortization 1 6
Bad debt expense - 10
Gain on sale of marketable securities (129) (26)
Unrealized loss on unmarketable securities - 39
Deferred income (85) (86)
Net change in operating assets and liabilities 1,956 741
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Cash flows from operating activities $ 674 $2,174
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ORBIT INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2010 DECEMBER 31, 2009
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ASSETS
Current assets:
Cash and cash equivalents $ 1,964,000 $ 2,078,000
Investments in marketable securities 146,000 1,019,000
Accounts receivable, less allowance for doubtful accounts 3,927,000 3,857,000
Inventories 11,627,000 11,624,000
Costs and estimated earnings in excess of billings on uncompleted contracts 468,000 1,079,000
Deferred tax asset 391,000 714,000
Other current assets 1,043,000 287,000
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Total current assets 19,566,000 20,658,000
Property and equipment, net 1,172,000 1,246,000
Goodwill 1,688,000 2,483,000
Intangible assets, net - 227,000
Deferred tax asset 1,847,000 1,403,000
Other assets 106,000 661,000
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Total assets $24,379,000 $26,678,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term obligations $ 931,000 $ 995,000
Notes payable-bank 387,000 988,000
Accounts payable 794,000 841,000
Liability associated with former senior officer 1,194,000 -
Income taxes payable - 57,000
Accrued expenses 1,051,000 1,102,000
Customer advances 118,000 32,000
Deferred income 85,000 85,000
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Total current liabilities 4,560,000 4,100,000
Deferred income 86,000 171,000
Liability associated with former senior officer 494,000 -
Long-term obligations 3,026,000 4,034,000
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Total liabilities 8,166,000 8,305,000
Stockholders' Equity
Common stock 510,000 493,000
Additional paid-in capital 22,360,000 21,464,000
Treasury stock (915,000) (913,000)
Accumulated other comprehensive gain 19,000 65,000
Accumulated deficit (5,761,000) (2,736,000)
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Stockholders' equity 16,213,000 18,373,000
Total liabilities and stockholders' equity $24,379,000 $26,678,000
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