Orbit International Corp. Reports 2024 Year End Results

Rhea-AI Summary

Orbit International Corp. (OTC PINK:ORBT) reported its financial results for 2024, showing a reduced net loss of $646,000 ($0.19 per share) compared to $1,147,000 ($0.34 per share) in 2023. The company's EBITDA improved to $159,000 in 2024 from a loss of $407,000 in 2023.

Key financial highlights include:

• Net sales increased to $29,898,000 from $27,556,000
• Gross margin improved to 33.3% from 31.7%
• Q4 2024 net sales were $8,708,000 vs $7,173,000 in Q4 2023
• Backlog decreased to $12.0 million from $17.4 million year-over-year

The company's performance was notably impacted by a non-cash $445,000 deferred tax expense. Operating results improved in the second half of 2024, driven by higher sales and improved gross profit at the Simulator Product Solutions (SPS) subsidiary and the Orbit Power Group (OPG). The company maintains access to a $4,000,000 line of credit, with $850,000 borrowed as of December 31, 2024.

Positive

• Net sales increased 8.5% to $29.9M in 2024 from $27.6M in 2023
• Gross margin improved to 33.3% from 31.7% year-over-year
• EBITDA turned positive to $159,000 from -$407,000 in prior year
• VPX power supplies bookings increased 91.5% in 2024
• Net loss reduced by 43.7% to $646,000 from $1.15M in 2023

Negative

• Backlog decreased 31% to $12.0M from $17.4M year-over-year
• Reported net loss of $646,000 in 2024
• Selling, general and administrative expenses increased by $699,000
• Book value per share declined to $5.34 from $5.54 at end of 2023
• Stock repurchase program remains suspended since May 2023

2024 Net Loss of $646,000 ($0.19 loss per share) v. Net Loss of $1,147,000 ($0.34 loss per share) in Prior Year Period.

2024 EBITDA, As Adjusted, was $159,000 ($0.05 per diluted share) v. a loss of $407,000 ($0.12 loss per share) in Prior Year Period.

Fourth Quarter 2024 Net Loss of $252,000 ($0.08 loss per share) v. Net Loss of $339,000 ($0.10 loss per share) in Prior Year Period.

Fourth Quarter 2024 EBITDA, As Adjusted, was $383,000 ($0.11 per diluted share) v. a loss of $206,000 ($0.06 loss per share) in Prior Year Period

Fourth Quarter and 2024 Financial Performance Adversely Affected by Non-Cash $445,000 ($0.13 loss per share) deferred tax expense

Backlog at December 31, 2024 was $12.0 million compared to $17.4 million at December 31, 2023

HAUPPAUGE, N.Y., March 13, 2025 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT) today announced results for the fourth quarter and the year ended December 31, 2024.

Fourth Quarter 2024 vs. Fourth Quarter 2023

• Net sales were $8,708,000, as compared to $7,173,000.
• Gross margin was 34.6%, as compared to 30.1%.
• Net loss was $252,000 ($0.08 loss per share), as compared to net loss of $339,000 ($0.10 loss per share). Current year net loss was adversely affected by a non-cash $445,000 ($0.13 loss per share) deferred tax expense.
• 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 $383,000 ($0.11 per diluted share), as compared to a loss of $206,000 ($0.06 loss per share).

Full Year 2024 vs. Full Year 2023

• Net sales were $29,898,000 as compared to $27,556,000.
• Gross margin was 33.3%, as compared to 31.7%.
• Net loss was $646,000 ($0.19 loss per share), as compared to a net loss of $1,147,000 ($0.34 loss per share). Current year net loss was adversely affected by a non-cash $445,000 ($0.13 loss per share) deferred tax expense.
• 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 $159,000 ($0.05 per diluted share), as compared to a loss of $407,000 ($0.12 loss per share).
• Backlog at December 31, 2024 was $12.0 million compared to $17.4 million at December 31, 2023.

Mitchell Binder, President and CEO of Orbit International commented, “Our net loss for the twelve months ended December 31, 2024, was $646,000 ($0.19 loss per share) compared to a net loss of $1,147,000 ($0.34 loss per share) for the prior comparable period. Our current year’s net loss was adversely affected by a non-cash $445,000 expense related to a reduction to our deferred tax asset. Exclusive of the charge, the net loss for the twelve months ended December 31, 2024, was $201,000 ($0.06 loss per share). EBITDA, as adjusted, for the twelve months ended December 31, 2024, was $159,000 ($0.05 per diluted share) compared to a loss of $407,000 ($0.12 loss per share) in the prior comparable period. The results for the twelve months ended December 31, 2024, were positively impacted by improved operating results during the second half of 2024 as compared to the first six months of 2024. The net loss for the three months ended December 31, 2024, was $252,000 ($0.08 loss per share) compared to a loss of $339,000 (0.10 loss per diluted share) in the comparable prior year period. Exclusive of the $445,000 charge related to a reduction in our deferred tax asset, net income for the three months ended December 31, 2024, was $193,000 ($0.06 per diluted share).”

Binder added, “Operating income during the second half of 2024 was positively affected by higher sales and improved gross profit at our Simulator Product Solutions LLC (“SPS”) subsidiary. The higher sales and improved gross profit resulted from significantly higher bookings at SPS in 2023. SPS is part of our Orbit Electronics Group (“OEG”). Operating income for the three months ended December 31, 2024 was positively affected by higher booking in 2024 at our Orbit Power Group (”OPG”).

Binder added, “Our current fourth quarter operating results were positively affected by the results from SPS and our OPG. Operating income at our Orbit Instrument division was approximately flat during the quarter. Our Orbit Instrument division has historically been our best performing operating unit with strong operating leverage. However, it has been adversely affected by contract delays and the pause in certain production contracts as our engineering team works with our customers for next generation enhancements. The Orbit Power Group (“OPG”), which makes up the remainder of our legacy business, recorded improved operating results during the fourth quarter in comparison to the prior year comparable period. The improved operating results of SPS during the quarter were attributable to higher sales and improved gross margins. In addition, general and administrative costs at SPS, in general, have stabilized, as we incurred significant infrastructure costs to support the increase in sales and bookings from 2023 as well as the increase in sales for 2024. At the time of the SPS acquisition in January 2022, we anticipated the need to invest in infrastructure and internal controls in order to bring SPS up to the standards of a public company. We believe that our cost structure at SPS is now aligned to support our growth.”

Mr. Binder added, “Our sales for the twelve months ended December 31, 2024, increased to $29,898,000 compared to $27,556,000 from the prior comparable period. This increase in sales was primarily attributable to increased SPS and OPG sales. The sales increase was partially offset by a decrease in sales from our OEG attributable to our legacy businesses and exclusive of SPS.”

Mr. Binder further added, “Our gross margin for the twelve months ended December 31, 2024, increased to 33.3% compared to 31.7% in the prior year comparable period. This increase in gross margin during the twelve months ended December 31, 2024, was attributable to a higher SPS gross margin due to operating leverage from increased sales and product mix and a higher OPG gross margin due to higher sales. Our overall increase in gross margin occurred despite a lower OEG gross margin (exclusive of SPS) due to lower sales in 2024. In addition, OEG gross margin for the prior year benefited from the significant amount of engineering deliverables made in 2023, which resulted in higher margins in that year.”

Mr. Binder added, “Our improved operating results for the twelve months ended December 31, 2024, were adversely affected by higher selling, general and administrative expenses in the current period. For the twelve months ended December 31, 2024, compared to the prior comparable period, selling, general and administrative expenses increased by $699,000, primarily due to higher expenses from SPS and slightly higher corporate expenses due to certain expenses related to the non-renewal of an employment contract of a senior officer, and increased payroll costs. Selling, general and administrative expenses at SPS increased during 2024 principally due to more than $200,000 of expenses incurred to an outside engineering firm, in order to modify legacy drawings as well as bill of material part identification that was developed prior to the acquisition. This was needed in order to conform to the actual manufacturing procedures to build the product as well as to comply with inventory internal controls. It is expected that additional expenses, in excess of $50,000, will be incurred in the first quarter of 2025 for these same reasons. Furthermore, selling, general and administrative expenses also increased during 2024 due to legal fees incurred for the litigation associated with the termination of the former President of SPS. Selling, general and administrative expenses at our OEG (exclusive of SPS), and our OPG did not materially change.”

Mr. Binder continued, “Backlog at December 31, 2024, was approximately $12,000,000 compared to approximately $17,400,000 at December 31, 2023, a decrease of approximately $5,400,000 or approximately 31.0%. This decrease in backlog is reflective of a general decrease in bookings from our OEG, inclusive of SPS and despite improved bookings from our OPG. In particular, for our OPG, bookings for our VPX power supplies for the year ended December 31, 2024, increased by 91.5% over the prior comparable period and represent the highest amount of VPX bookings in any previous calendar year. Bookings for our OEG, inclusive of SPS, are expected to improve as many anticipated follow-on awards, expected in the second half of 2024 were delayed, resulting in a poor second half of bookings for the segment. These awards are now expected to be received in the first half of 2025. Contract delays are an inherent part of doing business with the U.S. Government.”

David Goldman, Chief Financial Officer, noted, “At December 31, 2024, our cash and cash equivalents aggregated approximately $1.4 million and our financial condition continued to remain solid as evidenced by our 2.9 to 1 current ratio. We have access to a $4,000,000 line of credit (“LOC”) with our bank and have borrowed $850,000 under the LOC as of December 31, 2024. Our book value per share at December 31, 2024 was $5.34, which compares to $5.41 at September 30, 2024 and $5.54 at December 31, 2023. (Note: book value per share does not include any additional value for our partially reserved deferred tax asset.) To offset future federal and state taxes resulting from profits, we have approximately $2.4 million and $0.4 million in available federal and New York State net operating loss carryforwards, respectively.”

Mr. Binder added, “Because our revenues are tied to delivery schedules specified in our contracts, it is often difficult to judge our performance on a quarterly basis. Our operating results for the year ended December 31, 2024 reflect an improvement from our weak operating results in the prior year, primarily due to an increase in SPS sales, gross profit and operating income (despite an increase in SPS infrastructure costs), as well as an increase in OPG sales, gross profit and operating income. However, despite the improvement from SPS and our OPG, our operating results were adversely impacted by lower sales from our Orbit Instrument division, which negatively impacted 2024 operating results. As previously mentioned, our Orbit Instrument division has historically been our most profitable operating unit with strong operating leverage. Furthermore, due to contract delays across all of our divisions in our OEG, we are entering 2025 with a lower backlog which, unfortunately, will adversely affect our financial performance in the first half of 2025. Bookings have improved in the first quarter of 2025. These orders will help delivery schedules in the second half of 2025 and into 2026. We continue to pursue many opportunities in the marketplace and barring unforeseen delays, expect an improvement in bookings for 2025.”

Mr. Binder concluded, “On May 16, 2023, our Board of Directors moved to suspend our existing stock repurchase program and, to date, has not yet determined to reinstate the program. Through May 15, 2023, we had purchased approximately 188,185 shares under the existing program. However, in December 2024, our Board of Directors approved the purchase of 25,000 shares from a former insider, in a private transaction.”

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 December 31,								Year Ended December 31,
			2024				2023				2024				2023
Net sales		$	8,708			$	7,173			$	29,898			$	27,556
Cost of sales			5,695				5,016				19,945				18,830
Gross profit			3,013				2,157				9,953				8,726
Selling general and administrative			2,716				2,563				10,439				9,740
expenses
Interest expense			86				5				119				10
Other (income) expense, net			(3	)			(79	)			(436	)			84
Income (loss) before income taxes			214				(332	)			(169	)			(1,108	)
Income tax provision			466				7				477				39
Net loss		$	(252	)		$	(339	)		$	(646	)		$	(1,147	)
Basic loss per share		$	(0.08	)		$	(0.10	)		$	(0.19	)		$	(0.34	)
Diluted loss per share		$	(0.08	)		$	(0.10	)		$	(0.19	)		$	(0.34	)
Weighted average number of shares
outstanding:
Basic			3,339				3,339				3,343				3,343
Diluted			3,339				3,339				3,343				3,343

Orbit International Corp. Consolidated Statements of Operations (in thousands, except per share data) (unaudited)
		Three Months Ended December 31,								Year Ended December 31,
			2024				2023				2024				2023
EBITDA (as adjusted) Reconciliation
Net loss		$	(252	)		$	(339	)		$	(646	)		$	(1,147	)
Income tax expense			466				7				477				39
Depreciation and amortization			79				146				582				510
Interest expense			86				5				119				10
Fair value adj-contingent liabilities & other non-current liability			-				(25	)			(387	)			204
Stock-based compensation			4				-				14				(23	)
EBITDA (as adjusted) (1)		$	383			$	(206	)		$	159			$	(407	)
EBITDA (as adjusted) Per Diluted Share Reconciliation
Net loss		$	(0.08	)		$	(0.10	)		$	(0.19	)		$	(0.34	)
Income tax expense			0.14				-				0.14				0.01
Depreciation and amortization			0.02				0.05				0.17				0.15
Interest expense			0.03				-				0.04				-
Fair value adj-contingent liabilities & other non-current liability			-				(0.01	)			(0.11	)			0.06
Stock-based compensation			-				-				-				-
EBITDA (as adjusted), per diluted share (1)		$	0.11			$	(0.06	)		$	0.05			$	(0.12	)

(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 adjustment-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.

		Year Ended December 31,
Reconciliation of EBITDA, as adjusted, to cash flows (used in) provided by operating activities (1)			2024				2023
EBITDA (as adjusted)		$	159			$	(407	)
Income tax expense			(32	)			(39	)
Interest expense			(119	)			(10	)
Gain on sale of fixed asset			-				(34	)
Fair value adjustment-contingent liabilities and other non-current liability			387				(204	)
Stock-based compensation			29				71
Net change in operating assets and liabilities			(425	)			(783	)
Cash flows used in operating activities		$	(1	)		$	(1,406	)

Orbit International Corp. Consolidated Balance Sheets
	December 31, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,355,000		$	1,265,000
Accounts receivable, less allowance for credit losses		3,935,000			3,648,000
Inventories		8,884,000			10,034,000
Contract assets		643,000			384,000
Other current assets		428,000			445,000
Total current assets		15,245,000			15,776,000
Property and equipment		1,192,000			1,221,000
Right of use assets, operating leases		2,297,000			2,722,000
Right of use assets, financing leases		77,000			-
Goodwill		3,515,000			3,515,000
Intangible assets, net		2,322,000			2,564,000
Deferred tax asset		100,000			545,000
Other assets		53,000			53,000
Total assets	$	24,801,000		$	26,396,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	878,000		$	1,116,000
Accrued expenses		990,000			1,124,000
Dividend payable		-			33,000
Notes payable		99,000			55,000
Lease liabilities, finance leases		38,000			-
Lease liabilities, operating leases		717,000			618,000
Contingent liabilities		1,362,000			565,000
Line of credit		850,000			-
Customer advances		296,000			662,000
Total current liabilities		5,230,000			4,173,000
Notes payable, net of current portion		83,000			92,000
Other non-current liability		-			1,434,000
Lease liabilities, financing leases		41,000			-
Lease liabilities, operating leases		1,678,000			2,184,000
Total liabilities		7,032,000			7,883,000
Stockholders’ Equity
Common stock		351,000			353,000
Additional paid-in capital		17,171,000			17,233,000
Treasury stock		(1,224,000	)		(1,224,000	)
Retained earnings		1,471,000			2,151,000
Stockholders’ equity		17,769,000			18,513,000
Total liabilities and stockholders’ equity	$	24,801,000		$	26,396,000

FAQ

What was Orbit International's (ORBT) net loss for full year 2024?

ORBT reported a net loss of $646,000 ($0.19 per share) for 2024, compared to a net loss of $1,147,000 ($0.34 per share) in 2023.

How much did ORBT's backlog decrease in 2024?

ORBT's backlog decreased by 31% to $12.0 million as of December 31, 2024, compared to $17.4 million at the end of 2023.

What was ORBT's revenue growth in 2024?

ORBT's net sales increased to $29,898,000 in 2024, up from $27,556,000 in 2023, representing an 8.5% growth.

How much did ORBT's gross margin improve in 2024?

ORBT's gross margin improved to 33.3% in 2024 from 31.7% in 2023, driven by higher SPS gross margin and improved OPG performance.

What was ORBT's EBITDA performance in 2024?

ORBT's EBITDA improved to $159,000 ($0.05 per diluted share) in 2024, compared to a loss of $407,000 ($0.12 loss per share) in 2023.