Orbit International Corp. to Recommence Stock Repurchase Program

Rhea-AI Summary

Orbit International Corp. has authorized a share repurchase program of up to $600,000 for its common shares, resuming its previously suspended buyback due to the COVID-19 pandemic. The Board noted improved financial stability and outlook as key factors for this decision. The share repurchase program can be complemented by cash dividends, although these have not yet been reinstated. Additionally, Orbit is seeking to extend its line of credit from $600,000 to $850,000 by Q2 2021.

Positive

• Authorization of a $600,000 share repurchase program signals confidence in financial stability.
• Expected increase in the line of credit to $850,000 may enhance liquidity and operational flexibility.

Negative

• None.

Authorization to Purchase Up to $600,000 of Its Common Shares

HAUPPAUGE, N.Y., June 02, 2021 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT), an electronics manufacturer and software solution provider, today announced that its Board of Directors has authorized the Company to recommence its share repurchase program with an approval to purchase up to $600,000 of its common shares. The $600,000 program would normally be reduced by the amount of any cash dividend payments made to its shareholders; however, the Board did not commit to recommencing its quarterly cash dividend, which it suspended along with its share repurchase program in May 2020 and April 2020, respectively, due to the COVID-19 pandemic.

The Company currently has bank approval for up to $600,000 of share repurchases and cash dividend payments under its current lending agreement and is in the process of increasing the amount to $850,000 in connection with the extension of its line of credit agreement with its primary lender. The Company expects to have the extension completed by the end of the current second quarter.

Mitchell Binder, President and CEO of Orbit International commented, “Based on the improved outlook regarding the COVID-19 pandemic and the continued stability of our financial condition, I am pleased to report that our Board of Directors has authorized the Company to recommence our share repurchase program. Although we are still dealing with some of the pandemic’s effects, our concern for any related long-term consequences has been reduced.”

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

FAQ

What is the purpose of Orbit International's share repurchase program authorized for $600,000?

The share repurchase program aims to enhance shareholder value by reducing the number of outstanding shares, potentially increasing earnings per share.

When did Orbit International announce the recommencement of its share repurchase program?

Orbit International announced the recommencement of its share repurchase program on June 2, 2021.

What is the current status of Orbit International's quarterly cash dividend?

The quarterly cash dividend has not been reinstated, as the Board of Directors has not committed to resuming it yet.

How much is Orbit International looking to increase its line of credit?

Orbit International is in the process of increasing its line of credit from $600,000 to $850,000.

What financial condition is Orbit International in that led to the share buyback announcement?

The company noted improved financial stability and an optimistic outlook regarding the ongoing effects of the COVID-19 pandemic as factors for the share buyback.