UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 6, 2009
ORBIT INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-3936 11-1826363
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
80 CABOT COURT
HAUPPAUGE, NEW YORK 11788
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: 631-435-8300
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230-425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On August 6, 2009, Orbit International Corp. ("Orbit") issued a press release
announcing its operating results for its second quarter and six months ended
June 30, 2009. Although the Company had previously disclosed it had terminated
the services of an investment banker to pursue strategic alternatives to enhance
shareholder value, during the Company's investor conference call on the same
date, the Company stated that it had hired a new investment banker, Stifel
Nicolaus & Company, to perform those services. 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 hereby
furnished as follows:
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
CONTACT or Investor Relations Counsel
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Mitchell Binder Lena Cati, 212-836-9611
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Executive Vice President Linda Latman, 212-836-9609
631-435-8300 The Equity Group Inc.
ORBIT INTERNATIONAL CORP. REPORTS 2009 SECOND QUARTER RESULTS
COMPANY RETURNS TO PROFITABILITY FOR THE QUARTER DESPITE CONTINUED CONTRACT
DELAYS
EXPECTS REVENUE GROWTH AND IMPROVED PROFITABILITY FOR SECOND HALF OF 2009
Hauppauge, New York, August 6, 2009 - Orbit International Corp. (NASDAQ:ORBT),
an electronics manufacturer, systems integrator and software solution provider,
today announced results for the second quarter and six month period ended June
30, 2009.
SECOND QUARTER 2009 VS. SECOND QUARTER 2008
- Net sales increased 4% to $6,106,000 compared to $5,873,000;
- Gross margin was 41.9% compared to 39.7%;
- Net income was $6,000 or $.00 per diluted share compared to net loss of
$306,000 or $.07 per share; and,
- Earnings before interest, taxes, depreciation and amortization, and stock
based compensation (EBITDA, as adjusted) was $310,000 ($.07 per diluted share)
compared to $30,000 ($.01 per diluted share).
FIRST HALF 2009 VS. FIRST HALF 2008
- Net sales were $12,153,000 compared to $12,483,000, a decrease of 2.6%;
- Gross margin was 39.8% for both periods;
- Net loss was $347,000 or $.08 per share compared to net loss of $295,000
or $.07 per share;
- EBITDA, as adjusted, decreased to $261,000 ($.06 per diluted share)
compared to $412,000 ($.09 per diluted share); and,
- Backlog at June 30, 2009 was $12.4 million compared to $15.3 million at
mid-year 2008 and $14.3 million reported at March 31, 2009.
Dennis Sunshine, President and Chief Executive Officer stated,
"Although second quarter net sales were below our expectations due to continued
contract delays, we reported a 4% increase in sales, improved gross margin and
significantly higher EBIDTA compared to the prior year. Our sales were once
again impacted by contract delays that were, and continue to be beyond our
control. As previously reported, approximately $4.5 million in orders for our
ICS subsidiary in support of the MK119 Gun Console System that were expected in
the first half of the year are still pending. Our customer has assured us that
funding for this program is in place, and the release of this award will come
shortly. The $1.9 million RCU order, which we expected in the first half, was
received this month and announced earlier this morning. The receipt of the MK
119 order, along with our new RCU order should add approximately $6.4 million to
our backlog in the current quarter and support future revenue in the second half
of the year and into 2010."
Sunshine added, "Based upon our backlog of $12.4 million, and current delivery
schedules on projects underway and several multi-million orders that are pending
and expected shortly, together with anticipated business opportunities for new
and retrofit programs, we remain confident that 2009 will be a year of improved
operating performance. We have stated several times that although the Company
does not have a seasonal business cycle, our operating performance for the last
two years has typically been stronger in the second half of the year, and 2009
appears to be trending there as well. Furthermore, our ongoing focus on tightly
managing costs should enhance the positive impact of revenue growth with an even
greater improvement in profitability."
Sunshine continued, "Our confidence is based upon several design and prototype
programs that have entered into full production quantity requirements in 2009.
These include the $2 million Black Hawk helicopter retrofit and display upgrade
contract awarded to our Electronics Group in late December 2008, for which
shipments are scheduled in the second half of 2009 and the design and
qualification award for the CH-53E Sea Stallion helicopter upgrade program
awarded in January of this year. The Sea Stallion program has the potential to
become a $3 million revenue program starting later this year and continuing
through 2011."
Sunshine added, "In addition, over the last several quarters, Orbit was selected
by several new customers as their supplier of choice for critical design and
development program opportunities. These programs include the manufacture of:
Color Plasma Entry Panels for the U.S Navy Inventory Control Point; hot
swappable DC power supplies for use as part of a nuclear power plant control
system; a new COTS power supply which will be embedded on the advanced gun
control system for the U.S. Navy's DDG-1000 Zumwalt Class Destroyers; a switch
matrix system for ground mobile vehicle systems; and, ruggedized color displays
for virtually all mass transit systems nationwide. Although these programs have
the potential for large follow-on awards and a source of significant future
revenue, the timing of these potential releases remains uncertain."
Sunshine noted, "Several of the new business opportunities that our Power and
Electronics Groups are currently working on have been specifically identified by
the U.S. Department of Defense as being critical for future military engagements
abroad. We are pursuing follow-on awards from our expanded base of prime global
defense electronics contractors, as the modernization and critical refurbishment
of existing military equipment continues to be a top priority of the current
administration."
Sunshine added, "Our Tulip subsidiary, located in Quakertown, PA., is in the
process of relocating its operations to a larger manufacturing facility, several
miles from the current facility. This subsidiary, which has been experiencing
strong internal growth and pursuing several new business opportunities, will now
have the capacity and capability to handle significant program quantity
requirements without any production schedule interruptions. Several significant
program opportunities that are using Tulip display and switch bezel solutions,
are on either near completion of system qualification testing, or are
incorporating several last minute design change requests prior to finalizing
production awards."
Mitchell Binder, Chief Financial Officer, added, "Our financial condition
remains strong. At June 30, 2009, total current assets were $20,796,000 versus
total current liabilities of $4,024,000 for a 5.2 to 1 current ratio. It should
be noted that our inventory has increased from year end which is primarily due
to ICS, during the second quarter, commencing the procurement process for
materials for the MK119 Gun Console System contract. In addition, 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."
Binder added, "Our cash and cash equivalents and marketable securities as of
June 30, 2009 were approximately $3.1 million having used approximately $629,000
to repurchase shares under our $3 million treasury stock repurchase program.
From August 2008 through July 31, 2009, a total of 280,617 common shares have
been repurchased at an average price of $2.30 per share. Finally, our tangible
book value at June 30, 2009 was $3.15 per share, increasing from $3.10 reported
at March 31, 2009, but decreasing slightly compared to $3.19 reported at
December 31, 2008."
Binder also stated, "As a result of lower than expected profitability due to
customer contract delays described above, at June 30, 2009, the Company was not
in compliance with two of its financial covenants with its primary lender. The
Company believes it will obtain a waiver from its lender, but there can be no
assurance that such waiver will be obtained. In the event such waiver is not
obtained, all long term debt reflected on the Company's financial statements
would be reclassified to current liabilities."
Binder concluded, "We continue to believe that the current trading price of our
stock does not adequately reflect the present value of our Company nor the
significance of several potential growth opportunities. Consequently, we intend
to continue to purchase shares under our program subject to market conditions
and at times when we deem it appropriate."
Sunshine concluded, "Our management continues to explore a number of strategic
and financial alternatives that would enhance shareholder value, including the
priority of synergistic acquisitions and/or the potential sale of the Company."
CONFERENCE CALL
The Company will hold a conference call for investors today, August 6, 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.
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.
(See Accompanying Tables)
ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 2009 2008
----- ------- ------- --------
Net sales $6,106 $5,873 $12,153 $12,483
Cost of sales 3,547 3,543 7,320 7,518
------ ----- ------- ------
Gross profit 2,559 2,330 4,833 4,965
Selling general and administrative
expenses 2,564 2,631 5,165 5,249
Interest expense 42 80 88 182
Investment and other income (56) (82) (76) (178)
------ ------- ------- -------
Net income (loss) before taxes 9 (299) (344) (288)
Income tax provision 3 7 3 7
------ ------- ------- --------
Net income (loss) $ 6 $ (306) $ (347) $ (295)
===== ====== ======= ========
Basic earnings (loss) per share $ 0.00 $(0.07) $ (0.08) $ (0.07)
====== ====== ======= =======
Diluted earnings (loss) per share $ 0.00 $(0.07) $ (0.08) $ (0.07)
====== ====== ======= =======
Weighted average number of shares outstanding:
Basic 4,364 4,508 4,320 4,504
===== ===== ===== =====
Diluted 4,413 4,508 4,320 4,504
====== ===== ===== =====
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ORBIT INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 2009 2008
----- ------ ----- -------
EBITDA Reconciliation (as adjusted)
-------------------------------------------------
Net income (loss) $ 6 $ (306) $ (347) $ (295)
Interest expense 42 80 88 182
Tax expense 3 7 3 7
Depreciation and amortization 181 198 360 424
Stock based compensation 78 51 157 94
----- ------- ------- -------
EBITDA (1) $ 310 $ 30 $ 261 $ 412
===== ====== ====== ======
Adjusted EBITDA Per Diluted Share Reconciliation
-------------------------------------------------
Net income (loss) $0.00 $(0.07) $(0.08) $(0.07)
Interest expense 0.01 0.02 0.02 0.04
Tax expense 0.00 0.00 0.00 0.00
Depreciation and amortization 0.04 0.05 0.08 0.10
Stock based compensation 0.02 0.01 0.04 0.02
----- ------- ------- -------
EBITDA per diluted share (1) $0.07 $ 0.01 $ 0.06 $ 0.09
====== ======= ======= =======
(1) The EBITDA tables (as adjusted) presented are not determined in accordance
with accounting principles generally accepted in the country-regionplaceUnited
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, income taxes and stock based compensation.
Adjusted EBITDA as presented herein may not be comparable to similarly named
measures reported by other companies.
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SIX MONTHS ENDED
JUNE 30,
Reconciliation of EBITDA, as adjusted,
to cash flows from operating activities (1) 2009 2008
------------------------------------------- ------ -------
EBITDA (as adjusted) $ 261 $ 412
Interest expense (88) (182)
Tax expense (3) (7)
Bond amortization 5 8
Bad debt expense 10 0
Write-down of (gain on) marketable securities 39 0
Deferred income (22) (232)
Net change in operating assets and liabilities 1,153 (770)
------- --------
Cash flows from (used in) operating activities $1,355 (771)
====== ========
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Orbit International News Release Page 8
August 6, 2009
ORBIT INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2009 DECEMBER 31, 2008(2)
------------- ------------
(UNAUDITED)
Current assets:
Cash and cash equivalents $ 2,130,000 $ 2,080,000
Investments in marketable securities 1,020,000 1,127,000
Accounts receivable, less allowance for doubtful accounts 3,854,000 6,333,000
Inventories 12,405,000 11,536,000
Deferred tax asset 1,159,000 850,000
Other current assets 228,000 198,000
---------- -----------
Total current assets 20,796,000 22,124,000
Property and equipment, net 772,000 655,000
Intangible assets, net 2,098,000 2,346,000
Goodwill 2,909,000 2,909,000
Deferred tax asset 1,000,000 1,322,000
Other assets 649,000 644,000
----------- ------------
Total assets $28,224,000 $30,000,000
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term obligations $ 1,602,000 $ 1,777,000
Notes payable-bank 1,000 399,000
Accounts payable 1,100,000 1,499,000
Income taxes payable 5,000 6,000
Accrued expenses 1,186,000 1,185,000
Customer advances 45,000 37,000
Deferred income 85,000 85,000
---------- ----------
Total current liabilities 4,024,000 4,988,000
Deferred income 214,000 257,000
Long-term obligations 4,315,000 5,029,000
--------- -----------
Total liabilities 8,553,000 10,274,000
Stockholders' Equity
Common stock 493,000 477,000
Additional paid-in capital 21,299,000 21,032,000
Treasury stock (629,000) (529,000)
Accumulated other comprehensive loss (16,000) (125,000)
Accumulated deficit (1,476,000) (1,129,000)
---------- -----------
Stockholders' equity 19,671,000 19,726,000
========== ===========
Total liabilities and stockholders' equity $28,224,000 $30,000,000
=========== ============
(2) The balance sheet at December 31, 2008 has been derived from the audited financial statements at
that date but does not include all the information and footnotes required by accounting principles
generally accepted in the country-regionplaceUnited States of America for complete financial
statements.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 6, 2009
Orbit International Corp.
By: /s/ Dennis Sunshine
-----------------------------
Dennis Sunshine
Chief Executive Officer and President
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