-- Company Reports Record Free Cash Flow in the Quarter --
-- Orbital on Track to Conduct Weekly Space Missions or Product Deliveries in 2014 --
Net income in the first quarter of 2014 was
Mr.
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* Free cash flow is a non-GAAP financial measure. For additional details concerning this measure, please refer to the sections of this press release entitled Cash Flow and Disclosure of Non-GAAP Financial Measure. |
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Financial Highlights |
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First Quarter |
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| ($ in millions, except per share data) | 2014 | 2013 | |||||||
| Revenues | $ | 323.3 | $ | 334.8 | |||||
| Operating Income | 23.0 | 31.1 | |||||||
| Net Income | 13.8 | 19.6 | |||||||
| Diluted Earnings Per Share | $ | 0.23 | $ | 0.33 | |||||
Revenues decreased
Operating income decreased
Operating results in the first quarter of 2014 reflected the impact of
an anomaly detected during in-orbit testing of the Amazonas 4A
communications satellite that was launched in
Net income in the first quarter of 2014 was
Segment Results
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Launch Vehicles |
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| First Quarter | ||||||||||||
| ($ in millions) | 2014 | 2013 | % Change | |||||||||
| Revenues | $137.2 | $134.3 | 2% | |||||||||
| Operating Income | 11.7 | 12.0 | (3%) | |||||||||
| Operating Margin | 8.5% | 8.9% | ||||||||||
Launch vehicles segment revenues increased
Segment operating income decreased
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Satellites and Space Systems |
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| First Quarter | |||||||||||||||||
| ($ in millions) | 2014 | 2013 | % Change | ||||||||||||||
| Revenues | $ | 82.8 | $ | 100.8 | (18 | %) | |||||||||||
| Operating Income | 3.3 | 10.9 | (70 | %) | |||||||||||||
| Operating Margin | 4.0 | % | 10.8 | % | |||||||||||||
Satellites and space systems segment revenues decreased
Segment operating income decreased
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Advanced Space Programs |
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| First Quarter | |||||||||||||||||
| ($ in millions) | 2014 | 2013 | % Change | ||||||||||||||
| Revenues | $ | 107.3 | $ | 113.3 | (5 | %) | |||||||||||
| Operating Income | 8.0 | 8.2 | (2 | %) | |||||||||||||
| Operating Margin | 7.5 | % | 7.2 | % | |||||||||||||
Advanced space programs segment revenues decreased
Segment operating income decreased
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Cash Flow |
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First Quarter |
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| Net cash provided by operating activities | $ | 85.4 | ||||
| Capital expenditures | (8.4 | ) | ||||
| Proceeds from disposition of property | 10.0 | |||||
| Free cash flow | 87.0 | |||||
| Other, net | (2.0 | ) | ||||
| Net increase in cash | 85.0 | |||||
| Beginning cash balance | 265.8 | |||||
| Ending cash balance | $ | 350.8 | ||||
New Business Highlights
In the first quarter of 2014, Orbital recorded approximately
Operational Highlights
In the first quarter of 2014, Orbital carried out four major space
missions, launched a suborbital research rocket, and delivered six
additional systems to customers for upcoming operations. In January,
Orbital successfully launched its third Antares space launch vehicle,
which carried a company-built Cygnus cargo logistics spacecraft to the
For the remainder of 2014, Orbital plans to conduct numerous major
operational events and make additional system deliveries to customers
for future space missions or operational deployments, averaging about
one mission or product delivery per week. Major mission operations for
the remainder of 2014 will be highlighted by two additional Antares
rocket launches and Cygnus spacecraft deployments to the
2014 Financial Guidance
The company updated its financial guidance for full year 2014, increasing its outlook for free cash flow, as follows:
| Current | Previous | |||||||
| Revenues ($ in millions) | $1,450 - $1,500 | $1,450 - $1,500 | ||||||
| Operating Income Margin | 7.25% - 7.75% | 7.25% - 7.75% | ||||||
| Diluted Earnings per Share | $1.10 - $1.20 | $1.10 - $1.20 | ||||||
| Free Cash Flow ($ in millions) | $130 - $150 | $120 - $140 | ||||||
Annual Stockholders Meeting
Orbital will hold its Annual Meeting of Stockholders, which will include
a business update and outlook from Mr. Thompson, at its corporate
headquarters on
Disclosure of Non-GAAP Financial Measure
We define free cash flow as GAAP (U.S. Generally Accepted Accounting Principles) net cash provided by (used in) operating activities less capital expenditures for property, plant and equipment, plus proceeds from disposition of property. A reconciliation of free cash flow to net cash provided by (used in) operating activities is included above in the section entitled Cash Flow. Management believes that the company s presentation of free cash flow is useful because it provides investors with an important perspective on the company s liquidity, financial flexibility and ability to fund operations and service debt.
Orbital does not intend for the above non-GAAP financial measure to be considered in isolation or as a substitute for the related GAAP measure. Other companies may define this measure differently.
Social Media Disclosure
Orbital communicates material financial information to its investors
using press releases,
About Orbital
Orbital develops and manufactures small- and medium-class rockets and
space systems for commercial, military and civil government customers.
The company s primary products are satellites and launch vehicles,
including low-Earth orbit, geosynchronous-Earth orbit and planetary
exploration spacecraft for communications, remote sensing, scientific
and defense missions; human-rated space systems for Earth-orbit, lunar
and other missions; ground- and air-launched rockets that deliver
satellites into orbit; missile defense systems that are used as
interceptor and target vehicles; and advanced flight systems for
atmospheric and space missions. Orbital also provides satellite
subsystems and space-related technical services to
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements in this press release may be forward-looking in
nature or forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, those related to our
financial outlook, liquidity, goals, business strategy, projected plans
and objectives of management for future operating results and forecasts
of future events. These statements can be identified by the fact that
they do not relate strictly to historical or current facts.
Forward-looking statements often include the words anticipate,
forecast, expect, believe, should, will, intend, plan and
words of similar substance. Such forward-looking statements are subject
to risks, trends and uncertainties that could cause the actual results
or performance of the company to be materially different from the
forward-looking statement. Uncertainty surrounding factors such as
recoverability of insurance proceeds, continued government support and
funding for key space and defense programs, new product development
programs, the availability of key product components, such as our
Antares engines, product performance and market acceptance of products
and technologies, achievement of contractual milestones, government
contract procurement and termination risks and income tax rates, as well
as other risk factors and business considerations described in the
company s
A transcript of the earnings teleconference call will be available on Orbital s website at http://www.orbital.com/Investor.
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ORBITAL SCIENCES CORPORATION Consolidated Income Statements (in thousands, except per share data) |
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First Quarter | |||||||||||
| 2014 | 2013 | |||||||||||
| Revenues | $ | 323,285 | $ | 334,813 | ||||||||
| Cost of revenues | 268,863 | 246,386 | ||||||||||
| Research and development expenses | 6,865 | 32,133 | ||||||||||
| Selling, general and administrative expenses | 24,574 | 25,187 | ||||||||||
| Income from operations | 22,983 | 31,107 | ||||||||||
| Interest expense | (1,101 | ) | (1,110 | ) | ||||||||
| Other | (120 | ) | 566 | |||||||||
| Income before income taxes | 21,762 | 30,563 | ||||||||||
| Income tax provision | (7,950 | ) | (10,961 | ) | ||||||||
| Net income | $ | 13,812 | $ | 19,602 | ||||||||
| Basic income per share | $ | 0.23 | $ | 0.33 | ||||||||
| Diluted income per share | 0.23 | 0.33 | ||||||||||
| Shares used in computing basic income per share | 60,544 | 59,776 | ||||||||||
| Shares used in computing diluted income per share | 60,930 | 60,061 | ||||||||||
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ORBITAL SCIENCES CORPORATION Segment Information (in millions) |
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| First Quarter | ||||||||||||
| 2014 | 2013 | |||||||||||
| Revenues: | ||||||||||||
| Launch Vehicles | $ | 137.2 | $ | 134.3 | ||||||||
| Satellites and Space Systems | 82.8 | 100.8 | ||||||||||
| Advanced Space Programs | 107.3 | 113.3 | ||||||||||
| Eliminations | (4.0 | ) | (13.6 | ) | ||||||||
| Total revenues | $ | 323.3 | $ | 334.8 | ||||||||
| Income from operations: | ||||||||||||
| Launch Vehicles | $ | 11.7 | $ | 12.0 | ||||||||
| Satellites and Space Systems | 3.3 | 10.9 | ||||||||||
| Advanced Space Programs | 8.0 | 8.2 | ||||||||||
| Total income from operations | $ | 23.0 | $ | 31.1 | ||||||||
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ORBITAL SCIENCES CORPORATION Condensed Consolidated Balance Sheets (in thousands) |
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March 31, |
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December 31, |
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| Assets | ||||||||||
| Cash | $ | 350,800 | $ | 265,837 | ||||||
| Receivables | 453,885 | 583,518 | ||||||||
| Inventories | 52,081 | 61,675 | ||||||||
| Deferred income taxes, net | 31,237 | 30,154 | ||||||||
| Other current assets | 21,984 | 9,889 | ||||||||
| Total current assets | 909,987 | 951,073 | ||||||||
| Property, plant and equipment, net | 236,947 | 246,060 | ||||||||
| Goodwill | 71,260 | 71,260 | ||||||||
| Other non-current assets | 15,637 | 16,368 | ||||||||
| Total assets | $ | 1,233,831 | $ | 1,284,761 | ||||||
| Liabilities and stockholders equity | ||||||||||
| Accounts payable and accrued expenses | $ | 218,918 | $ | 281,631 | ||||||
| Deferred revenues and customer advances | 17,341 | 21,250 | ||||||||
| Current portion of long-term debt | 7,500 | 8,236 | ||||||||
| Total current liabilities | 243,759 | 311,117 | ||||||||
| Long-term debt | 133,125 | 135,000 | ||||||||
| Deferred income taxes, net | 17,307 | 26,611 | ||||||||
| Other non-current liabilities | 27,585 | 16,732 | ||||||||
| Total stockholders equity | 812,055 | 795,301 | ||||||||
| Total liabilities and stockholders equity | $ | 1,233,831 | $ | 1,284,761 | ||||||
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ORBITAL SCIENCES CORPORATION Condensed Consolidated Statements of Cash Flows (in thousands) |
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First Quarter |
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2014 |
2013 | ||||||||||
| Net income | $ | 13,812 | $ | 19,602 | ||||||||
| Depreciation and amortization | 10,471 | 9,824 | ||||||||||
| Deferred income taxes | 796 | 7,073 | ||||||||||
| Changes in assets and liabilities | 59,460 | (63,584 | ) | |||||||||
| Other | 932 | 1,270 | ||||||||||
| Net cash provided by (used in) operating activities | 85,471 | (25,815 | ) | |||||||||
| Capital expenditures | (8,443 | ) | (8,397 | ) | ||||||||
| Proceeds from disposition of property | 10,000 | - | ||||||||||
| Net cash provided by (used in) investing activities | 1,557 | (8,397 | ) | |||||||||
| Principal payments on long-term debt | (2,611 | ) | (1,875 | ) | ||||||||
| Net proceeds from issuance of common stock and other | 546 | 3,147 | ||||||||||
| Net cash (used in) provided by financing activities | (2,065 | ) | 1,272 | |||||||||
| Net increase (decrease) in cash | 84,963 | (32,940 | ) | |||||||||
| Cash, beginning of period | 265,837 | 232,324 | ||||||||||
| Cash, end of period | $ | 350,800 | $ | 199,384 | ||||||||
Source:
Orbital Sciences Corporation
Barron Beneski, 703-406-5528
Public
and Investor Relations
beneski.barron@orbital.com