Second Quarter 2024 Net Loss of $201,000 ($0.06 loss per share) v. Net Loss of $453,000 ($0.14 loss per share) in Prior Year Period Second Quarter 2024 EBITDA, As Adjusted, was a loss of $397,000 ($0.12 loss per share) v. $31,000 ($0.01 per diluted share) in Prior Year Period Six Months 2024 Net Loss of $952,000 ($0.28 loss per share) v. Net Loss of $1,570,000 ($0.47 loss per share) in Prior Year Period Six Months 2024 EBITDA, As Adjusted, was a loss of $948,000 ($0.28 loss per share) v. a loss of $1,103,000 ($0.33 loss per share) in Prior Year Period Backlog at June 30, 2024 up 18.4% from 2023 year-end Company Terminates Employment Contract of SPS President HAUPPAUGE, New York, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Orbit International Corp. (OTC Expert Market:ORBT) today announced results for the second quarter and six months ended June 30, 2024. Second Quarter 2024 vs. Second Quarter 2023 Net sales were $6,601,000, as compared to $6,993,000. Gross margin was 29.5%, as compared to 32.5%. Net loss was $201,000 ($0.06 loss per share), as compared to a net loss of $453,000 ($0.14 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 $397,000 ($0.12 loss per share), as compared to income of $31,000 ($0.01 per diluted share). Six Months 2024 vs. Six Months 2023 Net sales were $12,776,000 as compared to $12,191,000. Gross margin was 30.1%, as compared to 27.4%. Net loss was $952,000 ($0.28 loss per share), as compared to net loss of $1,570,000 ($0.47 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 $948,000 ($0.28 loss per share), as compared to a loss of $1,103,000 ($0.33 loss per share). Backlog at June 30, 2024 was $20.6 million compared to $23.8 million at March 31, 2024 and $17.4 million at December 31, 2023. Mitchell Binder, President and CEO of Orbit International commented, "Our net loss for the six months ended June 30, 2024, was $952,000 ($0.28 loss per share) compared to a net loss of $1,570,000 ($0.47 loss per share) for the prior comparable period. EBITDA, as adjusted, for the six months ended June 30, 2024, was a loss of $948,000 ($0.28 loss per share) compared to a loss of $1,103,000 ($0.33 per share) in the prior comparable period. Although we incurred a loss during the current period, operating results slightly improved from the prior comparable period due to higher sales at our Simulator Product Solutions LLC ("SPS") subsidiary. The higher sales followed significantly higher bookings at SPS during the prior twelve months ended December 31, 2023." Binder added, "Our current period operating results were adversely affected by lower operating income from our Orbit Instrument division, primarily due to lower sales during the quarter. Our Orbit Instrument division has historically been our best performing operating unit with great operating leverage. However, we expect sales from this division to improve in future quarters as a result of improved bookings that began in the second half of 2023. Our Orbit Power Group ("OPG"), which makes up the remainder of our legacy business, recorded improved operating results during the quarter. The improved operating results of SPS were attributable to higher sales and improved gross margins and despite higher general and administrative costs, as we incurred significant infrastructure costs to support the increase in sales and bookings from 2023 as well as the increase in sales expected 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 six months ended June 30, 2024, increased to $12,776,000 compared to $12,191,000 from the prior comparable period. This increase in sales was primarily attributable to increased sales from SPS, which is part of our Orbit Electronics Group ("OEG"), and our OPG. 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 six months ended June 30, 2024, increased to 30.1% compared to 27.4% in the prior comparable period. This increase in gross margin during the six months ended June 30, 2024, was attributable to a higher gross margin at both of our operating segments due to an increase in sales and despite an increase in infrastructure costs at SPS. We expect gross margins to continue to improve throughout 2024 as sales improve and we take advantage of the operating leverage inherent in our businesses." Mr. Binder added, "Despite the slight reduction in the operating loss for the six months ended June 30, 2024 compared to the prior comparable period, selling, general and administrative expenses for the current six month period increased by $463,000 from the prior comparable period, primarily due to higher expenses from SPS as well as higher corporate expenses due to certain expenses related to the non-renewal of an employment contract of a senior officer, higher accounting fees and increased payroll costs. Selling, general and administrative expenses at SPS increased during the current period principally because of additional sales personnel that were needed and hired during the second quarter of 2022 as well as higher commissions that were earned during the first half of 2024, resulting from a significant increase in bookings in the first quarter of 2024 compared to the comparable period of the prior year. Selling, general and administrative expenses at our OEG (exclusive of SPS), and our OPG did not materially change." Mr. Binder continued, "Backlog at June 30, 2024, was approximately $20,600,000 compared to approximately $17,400,000 at December 31, 2023, an increase of approximately $3,200,000 or approximately 18.4%. The increase in backlog is reflective of strong bookings from both our legacy business and SPS during the first half of 2024. In particular, for the OPG, bookings for our VPX power supplies for the seven months ended July 31, 2024 have exceeded the amount of VPX bookings from any previous full calendar year." David Goldman, Chief Financial Officer, noted, "At June 30, 2024, our cash and cash equivalents aggregated approximately $0.5 million and our financial condition continued to remain solid as evidenced by our 2.5 to 1 current ratio. Our book value per share at June 30, 2024 was $5.24, which compares to $5.30 at March 31, 2024 and $5.54 at December 31, 2023. (Note: book value per share does not include any additional value for our remaining reserved deferred tax asset). To offset future federal and state taxes resulting from profits, we have approximately $3.9 million and $0.5 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 first half operating loss for 2024 reflected an improvement from our weak operating results in the comparable period in the prior year. These results reflect an increase in operating income from SPS due to an increase in sales and despite an increase in infrastructure costs, as well as an increase from our OPG due to an increase in sales. However, despite the improvement from SPS and our OPG, our operating results were negatively impacted by lower sales from our Orbit Instrument division, which negatively impacted operating results for the first half of 2024. This was primarily the result of weak bookings in the first half of 2023. However, bookings from this division improved in the second half of 2023. As previously mentioned, our Orbit Instrument division has historically been our most profitable operating unit. Furthermore, for the first quarter ended March 31, 2024, as previously reported, we reported a very strong start to the 2024 year with consolidated bookings of approximately $12,700,000, which included strong bookings from both SPS and our legacy businesses. Although consolidated bookings cooled off in the second quarter, total bookings for 2024 are 39.6% higher than the prior comparable period. As a result, and based on delivery schedules, we expect revenue levels to increase, particularly in the second half of 2024 and we expect that the increase in sales will improve our operating results as we take advantage of the operating leverage inherent in our businesses." Mr. Binder concluded, "As a result of our stock being moved to the OTC Expert Market on May 16, 2023, our Board moved to suspend our existing repurchase program until the Company is reinstated onto the OTC Pink Market. On March 11, 2024, we filed our 2022 Annual Report with the OTC and filed our 2023 Annual Report on April 16, 2024. However, we are awaiting reinstatement from FINRA, which we now expect before the end of this current quarter. Through May 15, 2023, we had purchased approximately 188,185 shares under the existing program." The Company also announced today that it has terminated the employment contract of Nabil Radi Abdou, the President of its subsidiary, Simulator Product Solutions LLC ("SPS"). Mr. Abdou's contract would have expired on December 31, 2024. Mr. Abdou's duties and responsibilities, which included overseeing the engineering department of SPS, have been assumed by key members of the SPS management team. In addition, SPS recently hired an individual who holds a BS degree in Electrical Engineering and a PhD degree in Computer Science, who will be assuming the role of Vice President of Engineering at SPS. As part of the acquisition by Orbit in January 2022, Mr. Abdou, through a corporation owned by him, currently owns 19.9% of SPS. His ownership interest, based on a formula in the Operating Agreement signed at that time, is subject to mandatory repurchase by Orbit for $1,300,000 upon termination of Mr. Abdou's employment. This amount is reflected as a liability on Orbit's balance sheet. Mr. Abdou contends he was wrongfully dismissed and has claimed certain amounts he believes are due him under both his Employment Agreement and in connection with the Company's mandatory repurchase obligation under the Operating Agreement. Orbit believes it has abided by the terms of both the Employment Agreement and Operating Agreement and has valid offsets against amounts due to Mr. Abdou because of damages suffered by Orbit as a result of Mr. Abdou's conduct. The parties have commenced discussions in an attempt to avoid litigation. 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 EndedJune 30,   Six Months EndedJune 30,       2024       2023       2024       2023                     Net sales   $ 6,601     $ 6,993     $ 12,776     $ 12,191                     Cost of sales     4,656       4,722       8,931       8,846                     Gross profit     1,945       2,271       3,845       3,345                     Selling general and administrative expenses     2,531       2,391       5,174       4,711                     Interest expense     9       1       14       2                     Other income (expense), net     413       (320 )     427       (172 )                   Loss before income taxes     (182 )     (441 )     (916 )     (1,540 )                   Income tax provision     19       12       36       30