Orbit International Corp. Reports 2022 Second Quarter Results
Orbit International Corp. (OTC PINK:ORBT) reported a net loss of $412,000 ($0.12 per diluted share) for Q2 2022, compared to net income of $534,000 ($0.15 per diluted share) in Q2 2021. Net sales were stable at $5.8 million, while gross margin decreased to 28.4% from 37.2%. For the first half of 2022, net income was $54,000 ($0.02 per diluted share), down significantly due to prior PPP loan forgiveness. Backlog increased to $16.3 million, indicating potential future growth despite delivery delays. Cash reserves were approximately $4.7 million with a solid current ratio of 4.2 to 1.
- Backlog increased to $16.3 million, indicating future growth potential.
- Sales for six months rose to $12.6 million compared to $11.2 million last year.
- Cash and cash equivalents stood at approximately $4.7 million.
- Net loss of $412,000 in Q2 2022, down from net income of $534,000 in Q2 2021.
- EBITDA loss of $377,000 in Q2 2022 compared to income of $616,000 in Q2 2021.
- Gross margin decreased from 37.2% in Q2 2021 to 28.4% in Q2 2022.
Second Quarter 2022 Net Loss of
Second Quarter 2022 EBITDA, As Adjusted, was a loss of
Six Months 2022 Net Income of
Six months 2022 EBITDA, As Adjusted, of
HAUPPAUGE, N.Y., Aug. 11, 2022 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT) today announced results for the second quarter and six months ended June 30, 2022.
Second Quarter 2022 vs. Second Quarter 2021
- Net sales were
$5,801,000 for each of the current and prior quarterly periods. - Gross margin was
28.4% , as compared to37.2% . - Net loss was
$412,000 ($0.12 loss per diluted share), as compared to a net income of$534,000 ($0.15 per diluted share). - Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liabilities and other non-current liability, and stock-based compensation (EBITDA, as adjusted) was a loss of
$377,000 ($0.11 loss per diluted share), as compared to income of$616,000 ($0.18 per diluted share).
Six Months 2022 vs. Six Months 2021
- Net sales were
$12,644,000 , as compared to$11,194,000. - Gross margin was
33.4% , as compared to34.8% . - Net income was
$54,000 ($0.02 per diluted share), as compared to net income of$2,361,000 ($0.67 per diluted share). Net Income for the prior year period includes PPP loan forgiveness of$1,618,000 ($0.46 per diluted share). Exclusive of the PPP loan forgiveness, net income for the prior year was$743,000 ($0.21 per diluted share). - Earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liabilities and other non-current liability, and stock-based compensation (EBITDA, as adjusted) was
$169,000 ($0.05 per diluted share), as compared to income of$2,519,000 ($0.72 per diluted share). Prior year EBITDA, as adjusted, includes$1,618,000 of PPP loan forgiveness. Exclusive of the PPP loan forgiveness, EBITDA, as adjusted, was$901,000 ($0.26 per diluted share). - Backlog at June 30, 2022 was
$16.3 million compared to$15.3 million at March 31, 2022 and$17.8 million , inclusive of the backlog of SPS, at December 31, 2021.
EBITDA, as adjusted table, which accounts for non-recurring charges during the current and prior year quarters and six month periods:
Three months ended | Six months ended | ||||||||||
June 30, | June 30, | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
EBITDA, as adjusted | $ | (377,000 | ) | $ | 616,000 | $ | 169,000 | $ | 2,519,000 | ||
Acquisition costs | - | - | 98,000 | - | |||||||
Charge to Cost of Sales under Fair Value Accounting | 74,000 | - | 168,000 | - | |||||||
PPP Loan forgiveness | - | - | - | (1,618,000 | ) | ||||||
Total | $ | (303,000 | ) | $ | 616,000 | $ | 435,000 | $ | 901,000 | ||
Per diluted share | $ | (0.09 | ) | $ | 0.18 | $ | 0.13 | $ | 0.26 | ||
Mitchell Binder, President and CEO of Orbit International Corp. commented, “Based on delivery schedules, we expected second quarter results to be our weakest of 2022. In addition, some of our scheduled deliveries were delayed to the third and subsequent quarters and certain one-time unanticipated expenses were incurred by our newly acquired Simulator Product Solutions LLC (“SPS”) subsidiary. Also, gross margins from SPS were weaker than expected due to higher labor costs during the quarter. Our net income for the six months ended June 30, 2022, was
Mr. Binder added, “Our sales for the six months ended June 30, 2022, increased to
Mr. Binder further added, “Our gross margin for the six months ended June 30, 2022, exclusive of adjustments to SPS’ work in process and finished goods under FVA, decreased slightly to
Mr. Binder continued, “Backlog at June 30, 2022, was approximately
David Goldman, Chief Financial Officer, noted, “At June 30, 2022, our cash and cash equivalents aggregated approximately
Mr. Binder concluded, “Because our revenues are tied to delivery schedules specified in our contracts, it is often difficult to judge our performance on a quarterly basis. We completed a solid year of operating results in 2021 due to improved gross margins, and as a result of tight controls on our overall operating costs. We followed a very firm first quarter of operating results with weaker than expected second quarter results, as previously noted, and we remain confident in the future of our newly acquired SPS operation. During the second quarter of 2021, based on our improved outlook for our business regarding the COVID-19 pandemic and stability of our financial condition, our Board of Directors authorized the Company to recommence our share repurchase program and in March 2022, our Board of Directors authorized the Company to recommence our quarterly dividend program. Through August 10, 2022, we have purchased approximately 96,247 shares under the program. We remain confident in the operating performance of our legacy businesses as we move through 2022, although the timing of contract awards and supply chain issues remain a concern and could impact the timing of deliveries. Our operating team continues to work on potential solutions whenever receipt of components is delayed.”
In January 2022, Orbit International Corp. 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
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 facilities in Hauppauge, NY and Carson, CA. 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.
CONTACT
David Goldman
Chief Financial Officer
631-435-8300
(See Accompanying Tables)
Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Net sales | $ | 5,801 | $ | 5,801 | $ | 12,644 | $ | 11,194 | ||||||
Cost of sales | 4,151 | 3,642 | 8,424 | 7,301 | ||||||||||
Gross profit | 1,650 | 2,159 | 4,220 | 3,893 | ||||||||||
Selling general and administrative | 2,143 | 1,586 | 4,197 | 3,078 | ||||||||||
expenses | ||||||||||||||
Acquisition costs | - | - | 98 | - | ||||||||||
PPP loan forgiveness | - | - | - | (1,618 | ) | |||||||||
Other (income) expense, net | (99 | ) | 17 | (168 | ) | 37 | ||||||||
(Loss) income before income taxes | (394 | ) | 556 | 93 | 2,396 | |||||||||
Income tax provision | 18 | 22 | 39 | 35 | ||||||||||
Net (loss) income | $ | (412 | ) | $ | 534 | $ | 54 | $ | 2,361 | |||||
Basic (loss) earnings per share | $ | (0.12 | ) | $ | 0.15 | $ | 0.02 | $ | 0.67 | |||||
Diluted (loss) earnings per share | $ | (0.12 | ) | $ | 0.15 | $ | 0.02 | $ | 0.67 | |||||
Weighted average number of shares outstanding: | ||||||||||||||
Basic | 3,442 | 3,498 | 3,444 | 3,505 | ||||||||||
Diluted | 3,442 | 3,498 | 3,448 | 3,505 |
Orbit International Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||
EBITDA (as adjusted) Reconciliation | |||||||||||||
Net (loss) income | $ | (412 | ) | $ | 534 | $ | 54 | $ | 2,361 | ||||
Income tax expense | 18 | 22 | 39 | 35 | |||||||||
Depreciation and amortization | 100 | 26 | 201 | 53 | |||||||||
Fair value adj-contingent liabilities & other non-current liability | (94 | ) | 18 | (162 | ) | 40 | |||||||
Stock-based compensation | 11 | 16 | 37 | 30 | |||||||||
EBITDA (as adjusted) (1) | $ | (377 | ) | $ | 616 | $ | 169 | $ | 2,519 | ||||
EBITDA (as adjusted) Per Diluted Share Reconciliation | |||||||||||||
Net (loss) income | $ | (0.12 | ) | $ | 0.15 | $ | 0.02 | $ | 0.67 | ||||
Income tax expense | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||
Depreciation and amortization | 0.03 | 0.01 | 0.06 | 0.02 | |||||||||
Fair value adj-contingent liabilities & other non-current liability | (0.03 | ) | 0.01 | (0.05 | ) | 0.01 | |||||||
Stock-based compensation | 0.00 | 0.00 | 0.01 | 0.01 | |||||||||
EBITDA (as adjusted), per diluted share (1) | $ | (0.11 | ) | $ | 0.18 | $ | 0.05 | $ | 0.72 |
(1) | 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 adj.-contingent liabilities and other non-current 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 provided by (used in) operating activities (1) | 2022 | 2021 | ||||||
EBITDA (as adjusted) | $ | 169 | $ | 2,519 | ||||
Income tax expense | (39 | ) | (35 | ) | ||||
Fair value adj-contingent liabilities and other non-current liability | 162 | (40 | ) | |||||
Stock-based compensation | (11 | ) | (30 | ) | ||||
Gain on forgiveness of PPP loan | - | (1,618 | ) | |||||
Net change in operating assets and liabilities | (358 | ) | (1,179 | ) | ||||
Cash flows provided by (used in) operating activities | $ | (77 | ) | $ | (383 | ) |
Orbit International Corp.
Consolidated Balance Sheets
June 30, 2022 (unaudited) | December 31, 2021 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 4,651,000 | $ | 9,215,000 | ||
Accounts receivable, less allowance for doubtful accounts | 2,419,000 | 2,438,000 | ||||
Inventories | 11,060,000 | 8,540,000 | ||||
Contract assets | 716,000 | 648,000 | ||||
Other current assets | 557,000 | 416,000 | ||||
Total current assets | 19,403,000 | 21,257,000 | ||||
Property and equipment, net | 545,000 | 265,000 | ||||
Right of use assets, operating leases | 2,917,000 | 3,013,000 | ||||
Goodwill | 2,263,000 | 901,000 | ||||
Intangible assets, net Deferred tax asset | 3,678,000 545,000 | - 545,000 | ||||
Other assets | 39,000 | 30,000 | ||||
Total assets | $ | 29,390,000 | $ | 26,011,000 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 698,000 | $ | 504,000 | ||
Accrued expenses | 849,000 | 1,014,000 | ||||
Dividend payable | 35,000 | - | ||||
Note payable | 14,000 | - | ||||
Lease liabilities, operating leases Contingent liabilities Other current liability | 556,000 659,000 1,164,000 | 473,000 96,000 - | ||||
Customer advances | 683,000 | 866,000 | ||||
Total current liabilities | 4,658,000 | 2,953,000 | ||||
Note payable, net of current portion | 20,000 | - | ||||
Other non-current liability | 1,644,000 | - | ||||
Contingent liabilities, net of current portion Lease liabilities, operating leases | 476,000 2,423,000 | 208,000 2,596,000 | ||||
Total liabilities | 9,221,000 | 5,757,000 | ||||
Stockholders’ Equity | ||||||
Common stock | 352,000 | 351,000 | ||||
Additional paid-in capital | 17,134,000 | 17,109,000 | ||||
Treasury stock | (480,000 | ) | (384,000 | ) | ||
Retained earnings | 3,163,000 | 3,178,000 | ||||
Stockholders’ equity | 20,169,000 | 20,254,000 | ||||
Total liabilities and stockholders’ equity | $ | 29,390,000 | $ | 26,011,000 |
FAQ
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