HAUPPAUGE, N.Y.--()--Orbit International Corp. (NASDAQ:ORBT) today announced results for the fourth quarter and year ended December 31, 2011.
"In addition to growing our business organically, in 2012 we continue our pursuit of strategic accretive acquisitions and we are developing a pipeline of companies for consideration."
Fourth Quarter 2011 vs. Fourth Quarter 2010
- Net sales increased by 16.5% to $8,095,000 compared to $6,946,000;
- Gross margin increased to 44.5% from 32.6%;
- Net income was $1,009,000 ($0.21 earnings per diluted share) compared to a net loss of $3,028,000 ($0.66 loss per share). The net loss for the 2010 fourth quarter included a charge of $2,000,000 for costs related to non-renewal of the former chief executive officer contract (including a non-cash charge of $312,000 due to accelerated stock vesting) and $924,000 of non-cash impairment charges taken in connection with recorded intangible assets and goodwill related to its ICS subsidiary. Excluding these charges, the net loss for 2010 was $104,000 ($0.02 loss per share); and,
- Earnings before interest, taxes, depreciation and amortization, and stock based compensation (EBITDA, as adjusted) was $1,162,000 ($0.25 earnings per diluted share) compared to a loss of $1,564,000 ($0.34 loss per share).
Full Year 2011 vs. Full Year 2010
- Net sales increased by 16% to $31,041,000 compared to $26,749,000;
- Gross margin increased to 42.6% from 35.4%;
- Net income was $3,147,000 ($0.67 earnings per diluted share) compared to a net loss of $3,025,000 ($0.66 loss per share). Excluding the aforementioned fourth quarter charges, the 2010 net loss was $101,000 ($0.02 loss per share);
- EBITDA, as adjusted, was $3,845,000 ($0.82 earnings per diluted share) compared to a loss of $831,000 ($0.18 loss per share); and,
- Backlog at December 31, 2011 was $15.5 million as compared to $15.8 million at September 30, 2011 and $20.1 million at December 31, 2010. Backlog was $18.7 million at February 29, 2012.
Commenting on fourth quarter results, Mitchell Binder, President & Chief Executive Officer, stated, "The final quarter of 2011 was our strongest period of the year. The 16.5% increase in net sales produced over $1 million in net income, or a 12.5% net margin for the 2011 fourth quarter. The operating leverage inherent in our business enabled us to achieve a 44.5% gross margin and reduce selling, general and administrative (S, G & A) expenses as a percent of net sales to 31.6%."
He continued, "Our strong fourth quarter capped our best operating year in recent memory. Our net sales for 2011 exceeded $31 million and net income was over $3 million, improving by more than $6.1 million year over year, due to the increased sales, operating leverage (gross margin increased to approximately 43% returning to historical levels and S, G & A expenses as a percent of net sales decreased to 32.1% as compared to 35.9% in 2010) and due to over $2.9 million of costs related to non-renewal of the former chief executive officer contract and non-cash impairment charges which adversely affected the prior year."
Discussing backlog and expectations for 2012, Mr. Binder added, "We closed the year with backlog of $15.5 million and by February 29, 2012, backlog increased to $18.7 million due to strong bookings from both our Power and Electronics Groups. After a 35% increase in bookings, as well as record revenues and backlog in 2011, our Power Group's 2012 year-to-date bookings have remained strong and we expect to continue to receive follow-on orders for legacy programs in both our COTS and Commercial Divisions. Additionally, our Electronics Group started the year with a color display order from the U.S. Navy valued at approximately $1.8 million with an exercise of an option to purchase additional displays expected shortly. We are anticipating several large orders for Remote Control Units under the Common Transponder Program and for keyboards for the FAA, which as indicated by our customers, should be awarded by the end of the first quarter to accommodate their delivery requirements for this year."
Binder added, "Backlog from our TDL operating unit increased from year end due to a $1.3 million contract received for the ground mobile marketplace. In addition, TDL is also expecting approximately $1.5 million in new contracts for avionic displays which we expect to receive prior to the end of the second quarter. Our ICS subsidiary received an order for an additional two prototype units for its Serial Data Converter, the replacement for the MK-119, and also received an indication from the U.S. Navy of potential awards for additional MK-119s for foreign military sales by the end of 2012. Based upon our backlog, delivery schedules and expected orders, we anticipate another year of strong operating performance in 2012, although as was the case in 2011, our comparable and sequential quarterly performance may be uneven."
Mr. Binder concluded, "In addition to growing our business organically, in 2012 we continue our pursuit of strategic accretive acquisitions and we are developing a pipeline of companies for consideration."
David Goldman, Chief Financial Officer, noted, "Our financial condition remains strong. At December 31, 2011, total current assets were $20,876,000 versus total current liabilities of $3,838,000 for a 5.4 to 1 current ratio. Cash, cash equivalents and marketable securities as of December 31, 2011, aggregated over $2.6 million. Our inventory levels at 2011 year-end, although lower than September 30, 2011, were higher than one year ago and will continue to increase as buying has commenced for several orders expected for the Electronics Group. To offset federal and state taxes resulting from profits, we have approximately $9 million and $7 million in available federal