First Quarter 2025 Net Loss of $2,152,000 ($0.65 loss per share) v. Net Loss of $751,000 ($0.22 loss per share) in Prior Year Comparable Period
First Quarter 2025 EBITDA, as adjusted, was a loss of $1,949,000 ($0.59 loss per share) v. loss of $551,000 ($0.16 loss per share) in Prior Year Comparable Period
Backlog at March 31, 2025 was $13.3 million compared to $12.0 million at December 31, 2024
HAUPPAUGE, N.Y., May 12, 2025 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC PINK:ORBT) today announced results for the first quarter ended March 31, 2025.
First Quarter 2025 vs. First Quarter 2024
- Net sales were $4,726,000, as compared to $6,175,000.
- Gross margin was 12.4%, as compared to 30.8%.
- Net loss was $2,152,000 ($0.65 loss per share), as compared to a net loss of $751,000 ($0.22 loss per 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 $1,949,000 ($0.59 loss per share), as compared to a loss of $551,000 ($0.16 loss per share).
- Backlog at March 31, 2025 was $13.3 million compared to $12.0 million at December 31, 2024.
Mitchell Binder, President and CEO of Orbit International commented, "The first quarter for 2025 was a very challenging quarter for our Company. Our net loss for the three months ended March 31, 2025, was $2,152,000 ($0.65 loss per share) compared to a net loss of $751,000 ($0.22 loss per share) for the prior comparable period. EBITDA, as adjusted, for the three months ended March 31, 2025, was a loss of $1,949,000 ($0.59 loss per share) compared to a loss of $551,000 ($0.16 loss per share) in the prior comparable period. Our current first quarter operating results were negatively affected by significantly lower sales incurred by our Orbit Electronics Group ("OEG") inclusive of our Simulator Product Solutions LLC ("SPS") subsidiary. In particular, we incurred an operating loss at our Orbit Instrument division due to a gap in our delivery schedules. Our Orbit Instrument division has historically been our best performing operating unit with strong operating leverage. However, it was adversely affected by contract delays in the second half of 2024 and a temporary pause in certain production contracts as our engineering team worked with our customers for next generation enhancements. The Orbit Power Group ("OPG"), which makes up the remainder of our legacy business, recorded operating income that was relatively flat for the first quarter.
Binder added, "Operating results for SPS were adversely impacted by lower sales during the quarter as a consequence of reduced bookings in the second half of 2024 due to contract delays that were eventually awarded in 2025. Bookings were also negatively affected by ongoing opportunities that have not yet finalized in 2025 and certain lost opportunities, primarily due to lack of funding or our customer losing awards to competitors. Bookings for SPS in 2025 have since improved from the second half of 2024. In addition, aside from certain costs mentioned above, general and administrative costs at SPS, in general, have stabilized. We had incurred significant infrastructure costs in 2023 and 2024 in order to support SPS' sales increase since the Company's acquisition of the SPS business in 2022. At the time of the SPS acquisition, 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."
Binder noted, "Operating results for SPS were also burdened by more than $200,000 ($0.06 loss per share) of expenses incurred by SPS for fees paid to an outside engineering firm in order to modify legacy drawings, along with bill of material part identification, that was developed prior to the acquisition, as well as legal fees incurred in connection with the litigation associated with the termination of the former President of SPS."
Mr. Binder added, "Our sales for the three months ended March 31, 2025, decreased significantly to $4,726,000 compared to $6,175,000 from the prior comparable period. This decrease in sales was primarily attributable to lower sales at our OEG and despite higher sales at our OPG. As previously mentioned, the lower sales at our OEG were attributable to lower bookings in the second half of 2024 due primarily to contract delays which is an inherent risk in contracting with the U.S. government and its prime contractors."
Mr. Binder further added, "Our gross margin for the three months ended March 31, 2025, decreased to 12.4% compared to 30.8% in the prior year comparable period. The decrease in gross margin during the three months ended March 31, 2025, was attributable to a significantly lower gross margin at our OEG due to decreased sales resulting in a higher percentage attributable to overhead and other fixed costs; and a slightly lower OPG gross margin due to product mix and despite slightly higher sales."
Mr. Binder added, "For the three months ended March 31, 2025, selling, general and administrative expenses were $2,717,000, compared to $2,643,000, an increase of $74,000, primarily due to higher expenses from SPS and slightly higher corporate expenses. The increase in selling, general and administrative expenses at SPS increased principally due to more than $200,000 of expenses incurred for (i) an outside engineering firm engaged to modify legacy drawings as well as bill of material part identification that was developed prior to the acquisition and (ii) legal fees incurred in connection with the litigation associated with the termination of the former President of SPS. The engineering firm was needed in order to conform drawing documentation to the actual manufacturing procedures to build the product as well as to comply with inventory internal controls. This was in addition to over $200,000 in engineering fees that were incurred in the fourth quarter of 2024. The increase in corporate expenses was primarily due to (i) all audit fees for our 2024 audit being billed in the first quarter of 2025 whereas prior years audit fees were distributed during all the quarters and (2) slightly increased payroll costs. Selling, general and administrative expenses at our OEG (exclusive of SPS), and our OPG did not materially change. We expect that the outside engineering fees at SPS will decrease significantly, beginning the second quarter of 2025 and corporate expenses should also decrease beginning the second quarter due to the absence of any audit fees for the remainder of the year."
Mr. Binder continued, "Backlog at March 31, 2025, was approximately $13,300,000 compared to approximately $12,000,000 at December 31, 2024, an increase of approximately 10.8%. This increase in backlog is reflective of a general increase in bookings from our OEG, inclusive of SPS and despite a decrease in bookings from our OPG during the quarter. In 2024, for our OPG, bookings for our VPX power supplies increased by 91.5% over the prior comparable period and represented the highest amount of VPX bookings in any previous calendar year. We are hopeful that the momentum of continued bookings for our VPX power supplies will continue in 2025. Bookings for our OEG, inclusive of SPS, improved in the first quarter of 2025 and are expected to continue 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. Some of these orders were received in the first quarter of 2025 and are now expected to continue 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 March 31, 2025, our cash and cash equivalents aggregated approximately $0.7 million and our financial condition continued to remain solid as evidenced by our 2.5 to 1 current ratio. We have access to a $4,000,000 line of credit ("LOC") with our bank and have borrowed $900,000 under the LOC as of March 31, 2025. Our book value per share at March 31, 2025 was $4.69, which compares to $5.34 at December 31, 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 three months ended March 31, 2025 resulted from weak bookings in the second half of 2024 that emanated from contract delays that led to a significant gap in first quarter delivery schedules. Some of these contracts were awarded in the first quarter and some represent ongoing opportunities that we have not yet finalized with our customer. We reported at year end that these contract delays would adversely affect our operating performance in the first half of 2025. Although, we expect an improvement in the second quarter operating results, we expect the results to still be somewhat affected by the 2024 contract delays. Because of the improved bookings in the first quarter and our expectation of improved bookings throughout our operating units and barring unforeseen delays, we expect these awards to fill in our delivery schedules and lead to an improvement to operating results in the second half of 2025."
Mr. Binder concluded, "We continue to evaluate the impact of tariff announcements and are evaluating their impact on the cost of our products and, in particular, our VPX power supplies, which recorded significant sales growth in 2024 and is expected to be the driver of the growth of our OPG in the future. We are addressing the tariffs in a number of ways, including a pass through to our customers, adjusting our pricing, negotiating with our vendors or seeking out alternative sources. We've been proactive in moving certain of our foreign vendors to countries that are not expected to be materially affected by tariffs."
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, New York 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 March 31, (unaudited) | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | 4,726 | $ | 6,175 | ||||
| Cost of sales | 4,138 | 4,275 | ||||||
| Gross profit | 588 | 1,900 | ||||||
| Selling general and administrative expenses | 2,717 | 2,643 | ||||||
| Interest expense | 19 | 5 | ||||||
| Other (income) expense, net | (7 | ) | (14 | ) | ||||
| Loss before income taxes | (2,141 | ) | (734 | ) | ||||
| Income tax provision | 11 | 17 | ||||||
| Net loss | $ | (2,152 | ) | $ | (751 | ) | ||
| Basic loss per share | $ | (0.65 | ) | $ | (0.22 | ) | ||
| Diluted loss per share | $ | (0.65 | ) | $ | (0.22 | ) | ||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 3,327 | 3,343 | ||||||
| Diluted | 3,327 | 3,343 | ||||||
| Orbit International Corp. Consolidated Statements of Operations (in thousands, except per share data) (unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| EBITDA (as adjusted) Reconciliation | ||||||||
| Net loss | $ | (2,152 | ) | $ | (751 | ) | ||
| Income tax expense | 11 | 17 | ||||||
| Depreciation and amortization | 170 | 165 | ||||||
| Interest expense | 19 | 5 | ||||||
| Fair value adj-contingent liabilities & other non-current liability | - | 10 | ||||||
| Stock-based compensation | 3 | 3 | ||||||
| EBITDA (as adjusted) (1) | $ | (1,949 | ) | $ | (551 | ) | ||
| EBITDA (as adjusted) Per Diluted Share Reconciliation | ||||||||
| Net loss | $ | (0.65 | ) | $ | (0.22 | ) | ||
| Income tax expense | 0.00 | 0.01 | ||||||
| Depreciation and amortization | 0.05 | 0.05 | ||||||
| Interest expense | 0.01 | 0.00 | ||||||
| Fair value adj-contingent liabilities & other non-current liability | 0.00 | 0.00 | ||||||
| Stock-based compensation | 0.00 | 0.00 | ||||||
| EBITDA (as adjusted) per diluted share (1) | $ | (0.59 | ) | $ | (0.16 | ) | ||
(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.
| Three Months Ended March 31, | ||||||||
| Reconciliation of EBITDA, as adjusted, to cash flows provided by (used in) operating activities (1) | 2025 | 2024 | ||||||
| EBITDA (as adjusted) | $ | (1,949 | ) | $ | (551 | ) | ||
| Income tax expense | (11 | ) | (17 | ) | ||||
| Interest expense | (19 | ) | (5 | ) | ||||
| Fair value adj-contingent liabilities and other non-current liability | - | (10 | ) | |||||
| Stock-based compensation | 7 | 7 | ||||||
| Net change in operating assets and liabilities | 1,353 | 1,230 | ||||||
| Cash flows (used in) provided by operating activities | $ | (619 | ) | $ | 654 | |||
| Orbit International Corp. Consolidated Balance Sheets | |||||||
| March 31, 2025 (unaudited) | December 31, 2024 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 696,000 | $ | 1,355,000 | |||
| Accounts receivable, less allowance for credit losses | 2,152,000 | 3,935,000 | |||||
| Inventories | 9,068,000 | 8,884,000 | |||||
| Contract assets | 1,029,000 | 643,000 | |||||
| Other current assets | 376,000 | 428,000 | |||||
| Total current assets | 13,321,000 | 15,245,000 | |||||
| Property and equipment, net | 1,147,000 | 1,192,000 | |||||
| Right of use assets, operating leases | 2,122,000 | 2,297,000 | |||||
| Right of use assets, financing leases | 67,000 | 77,000 | |||||
| Goodwill | 3,515,000 | 3,515,000 | |||||
| Intangible assets, net Deferred tax asset | 2,262,000 100,000 | 2,322,000 100,000 | |||||
| Other assets | 52,000 | 53,000 | |||||
| Total assets | $ | 22,586,000 | $ | 24,801,000 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,000,000 | $ | 878,000 | |||
| Accrued expenses | 975,000 | 990,000 | |||||
| Notes payable | 86,000 | 99,000 | |||||
| Lease liabilities, operating leases | 716,000 | 717,000 | |||||
| Lease liabilities, financing leases | 39,000 | 38,000 | |||||
| Contingent liability | 1,362,000 | 1,362,000 | |||||
| Line of credit | 900,000 | 850,000 | |||||
| Customer advances | 282,000 | 296,000 | |||||
| Total current liabilities | 5,360,000 | 5,230,000 | |||||
| Notes payable, net of current portion | 69,000 | 83,000 | |||||
| Lease liabilities, operating leases | 1,498,000 | 1,678,000 | |||||
| Lease liabilities, financing leases | 31,000 | 41,000 | |||||
| Total liabilities | 6,958,000 | 7,032,000 | |||||
| Stockholders' Equity | |||||||
| Common stock | 352,000 | 351,000 | |||||
| Additional paid-in capital | 17,181,000 | 17,171,000 | |||||
| Treasury stock | (1,224,000 | ) | (1,224,000 | ||||
| Retained earnings (accumulated deficit) | (681,000 | ) | 1,471,000 | ||||
| Stockholders' equity | 15,628,000 | 17,769,000 | |||||
| Total liabilities and stockholders' equity | $ | 22,586,000 | $ | 24,801,000 | |||
