Orbit International Corp. Reports 2021 Second Quarter Results
Orbit International Corp. (OTC PINK:ORBT) reported a net income of $534,000 ($0.15 per diluted share) for Q2 2021, reversing a loss of $396,000 in the previous year. For six months, net income soared to $2,361,000 ($0.67 per diluted share) vs. a loss of $376,000 a year prior. Despite a slight decline in net sales for six months, gross margins improved to 34.8%. The company reported a backlog of $15.1 million, down from $17.9 million at the end of 2020. Cash and equivalents totaled $6.9 million. The board has authorized a share repurchase program amid a positive outlook, although supply chain concerns persist.
- Net income of $534,000 in Q2 2021 vs. a loss of $396,000 in Q2 2020.
- Six-month net income reached $2,361,000 compared to a loss of $376,000 in the prior year.
- Gross margin increased to 34.8% for six months from 24.6%.
- Cash and equivalents were approximately $6.9 million.
- Tangible book value per share improved to $5.36 from $4.70 at year-end 2020.
- Six-month net sales declined to $11,194,000 from $11,617,000 a year ago.
- Backlog decreased from $17.9 million at the end of 2020 to $15.1 million.
- Sales from the Orbit Power Group decreased due to lower shipment volumes.
Second Quarter 2021 Net Income of
Second Quarter 2021 EBITDA, As Adjusted, of
Six Months 2021 Net Income of
Six months 2021 EBITDA, As Adjusted, of
Exclusive of PPP Loan Forgiveness, Six Months Net Income was
HAUPPAUGE, N.Y., Aug. 11, 2021 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT) today announced results for the second quarter and six months ended June 30, 2021.
Second Quarter 2021 vs. Second Quarter 2020
- Net sales were
$5,801,000 , as compared to$5,765,000. - Gross margin was
37.2% , as compared to18.8% . - Net income was
$534,000 ($0.15 per diluted share), as compared to a net loss of$396,000 ($0.11 loss per share). - Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was
$616,000 ($0.18 per diluted share), as compared to a loss of$324,000 ($0.09 loss per share).
Six Months 2021 vs. Six Months 2020
- Net sales were
$11,194,000 , as compared to$11,617,000. - Gross margin was
34.8% , as compared to24.6% . - Net Income was
$2,361,000 ($0.67 per diluted share), as compared to net loss of$376,000 ($0.11 loss per share). - Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensation (EBITDA, as adjusted) was
$2,519,000 ($0.72 per diluted share), as compared to a loss of$238,000 ($0.07 loss per share). - Backlog at June 30, 2021 was
$15.1 million as compared to$15.8 million at March 31, 2021 and$17.9 at December 31, 2020.
Mitchell Binder, President and CEO of Orbit International Corp. commented, “Our net income for the six months ended June 30, 2021, was
Mr. Binder added, “Our sales for the three months ended June 30, 2021, increased to
Mr. Binder further added, “Our gross margin for the three months ended June 30, 2021, increased to
Mr. Binder continued, “Our backlog at June 30, 2021, was approximately
David Goldman, Chief Financial Officer, noted, “At June 30, 2021, our cash and cash equivalents aggregated approximately
Mr. Binder concluded, “Because our revenues are tied to our delivery schedules specified in our contracts, it often is difficult to judge our performance on a quarterly basis. During the second quarter, based on our improved outlook on our business regarding the COVID-19 pandemic and stability of our financial condition, our Board of Directors authorized our Company to recommence our share repurchase program. Through August 4, 2021, we have purchased approximately 49,500 shares under the program. We remain confident of our operating performance in the second half of 2021 although supply chain issues could have some impact on the timing of certain deliveries in the latter part of the year. Our operating team continues to work on potential solutions in the event certain receipt of components are delayed and impact delivery schedules. We are hopeful that all of these supply chain issues are resolved as we move into the first quarter of 2022.”
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.
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company was classified as an essential business by New York State and therefore was exempt from the state’s mandate that all non-essential businesses close their business locations until further notice. In addition, as a member of the Defense Industrial Base (“DIB”), the Company is mandated by the Secretary of Defense to continue to provide the essential products and services required to meet national security commitments to the Federal Government and the U.S. Military. The Company remains open while following guidance from the Centers for Disease Control (“CDC”) to best protect our employees. At this time, the length and severity of the COVID-19 pandemic is still unknown.
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.
CONTACT
David Goldman
Chief Financial Officer
631-435-8300
Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net sales | $ | 5,801 | $ | 5,765 | $ | 11,194 | $ | 11,617 | |||||||||||||||
Cost of sales | 3,642 | 4,681 | 7,301 | 8,760 | |||||||||||||||||||
Gross profit | 2,159 | 1,084 | 3,893 | 2,857 | |||||||||||||||||||
Selling general and administrative | 1,586 | 1,432 | 3,078 | 3,149 | |||||||||||||||||||
expenses | |||||||||||||||||||||||
PPP loan forgiveness | - | - | -1,618 | - | |||||||||||||||||||
Interest expense | - | 3 | - | 3 | |||||||||||||||||||
Other (income) expense, net | 17 | 30 | 37 | 52 | |||||||||||||||||||
Income (loss) before income taxes | 556 | -381 | 2.396 | -347 | |||||||||||||||||||
Income tax provision | 22 | 15 | 35 | 29 | |||||||||||||||||||
Net income (loss) | $ | 534 | $ | (396) | $ | 2,361 | $ | (376) | |||||||||||||||
Basic earnings (loss) per share | $ | 0.15 | $ | (0.11) | $ | 0.67 | $ | (0.11) | |||||||||||||||
Diluted earnings (loss) per share | $ | 0.15 | $ | (0.11) | $ | 0.67 | $ | (0.11) | |||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||
Basic | 3,498 | 3,511 | 3,505 | 3,517 | |||||||||||||||||||
Diluted | 3,498 | 3,511 | 3,505 | 3,517 |
Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
EBITDA (as adjusted) Reconciliation | ||||||||||||||||
Net income (loss) | $ | 534 | $ | (396) | $ | 2,361 | $ | (376) | ||||||||
Interest expense | - | 3 | - | 3 | ||||||||||||
Income tax expense | 22 | 15 | 35 | 29 | ||||||||||||
Depreciation and amortization | 26 | 23 | 53 | 46 | ||||||||||||
Fair value adj-contingent liability | 18 | 31 | 40 | 60 | ||||||||||||
Stock-based compensation | 16 | - | 30 | - | ||||||||||||
EBITDA (as adjusted) (1) | $ | 616 | $ | (324) | $ | 2,519 | $ | (238) | ||||||||
EBITDA (as adjusted) Per Diluted Share Reconciliation | ||||||||||||||||
Net income (loss) | $ | 0.15 | $ | (0.11) | $ | 0.67 | $ | (0.11) | ||||||||
Interest expense | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Income tax expense | 0.01 | 0.00 | 0.01 | 0.01 | ||||||||||||
Depreciation and amortization | 0.01 | 0.01 | 0.02 | 0.01 | ||||||||||||
Fair value adj-contingent liability | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||
Stock-based compensation | 0.00 | 0.00 | 0.01 | 0.00 | ||||||||||||
EBITDA (as adjusted), per diluted share (1) | $ | 0.18 | $ | (0.09) | $ | 0.72 | $ | (0.07) | ||||||||
- The EBITDA (as adjusted) tables presented are not determined in accordance with accounting principles generally accepted in the United States of America. Management uses EBITDA (as adjusted) 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 (as adjusted) 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, fair value adjustment-contingent liability and stock-based compensation. EBITDA (as adjusted) as presented herein may not be comparable to similarly named measures reported by other companies.
Six Months Ended June 30, | ||||||||
Reconciliation of EBITDA, as adjusted, to cash flows used in operating activities (1) | 2021 | 2020 | ||||||
EBITDA (as adjusted) | $ | 2,519 | $ | (238) | ||||
Interest Expense | - | (3) | ||||||
Income tax expense | (35) | - | ||||||
Stock-based compensation | (30) | (29) | ||||||
Gain on forgiveness of PPP Loan | (1,618) | - | ||||||
Fair value adj-contingent liability | (40) | (60) | ||||||
Net change in operating assets and liabilities | (1,179) | 74 | ||||||
Cash flows used in operating activities | $ | (383) | $ | (256) | ||||
Orbit International Corp.
Consolidated Balance Sheets
June 30, 2021 (unaudited) | December 31, 2020 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,872,000 | $ | 7,501,000 | ||||
Accounts receivable, less allowance for doubtful accounts | 2,727,000 | 2,751,000 | ||||||
Inventories | 8,964,000 | 9,396,000 | ||||||
Contract assets | 933,000 | 403,000 | ||||||
Income tax receivable | - | 290,000 | ||||||
Other current assets | 336,000 | 301,000 | ||||||
Total current assets | 19,832,000 | 20,642,000 | ||||||
Property and equipment, net | 313,000 | 351,000 | ||||||
Right of use assets, operating leases | 3,258,000 | 501,000 | ||||||
Goodwill | 901,000 | 901,000 | ||||||
Deferred tax asset | 545,000 | 545,000 | ||||||
Other assets | 30,000 | 30,000 | ||||||
Total assets | $ | 24,879,000 | $ | 22,970,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 854,000 | $ | 1,779,000 | ||||
Accrued expenses | 745,000 | 934,000 | ||||||
Lease liabilities, operating leases Contingent liability | 438,000 187,000 | 478,000 256,000 | ||||||
Customer advances | 133,000 | 155,000 | ||||||
Total current liabilities | 2,357,000 | 3,602,000 | ||||||
Notes payable, PPP loan, net of current portion | - | 1,606,000 | ||||||
Contingent liability, net of current portion Lease liabilities, operating leases | 166,000 2,835,000 | 318,000 53,000 | ||||||
Total liabilities | 5,358,000 | 5,579,000 | ||||||
Stockholders’ Equity | ||||||||
Common stock | 361,000 | 361,000 | ||||||
Additional paid-in capital | 17,667,000 | 17,667,000 | ||||||
Treasury stock | (800,000 | ) | (569,000 | ) | ||||
Retained earnings (accumulated deficit) | 2,293,000 | (68,000 | ) | |||||
Stockholders’ equity | 19,521,000 | 17,391,000 | ||||||
Total liabilities and stockholders’ equity | $ | 24,879,000 | $ | 22,970,000 | ||||
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