DULLES, Va., Apr 23, 2002 /PRNewswire-FirstCall via COMTEX/ --

First Quarter 2002 Highlights * Revenue Increases 27% to $121 Million * Net Income of $2.4 Million (or $0.05 Diluted EPS) * $960 Million in New Orders Won During the Quarter * Firm Backlog Increases 46% to $850 Million * Previous Revenue and Margin Guidance for 2002 Reaffirmed

Orbital Sciences Corporation (NYSE: ORB) today announced financial results for the first quarter of 2002, reporting significant improvements in revenue, operating income and net income relative to the first quarter of 2001. The company generated revenues of $120.7 million in the first quarter of this year, up 27% over the $94.9 million in revenues in the comparable quarter in 2001. Orbital's operating income was $5.2 million in the first quarter of 2002 as compared to an operating loss of $4.5 million during the same period in 2001. The company reported net income of $2.4 million (or $0.05 per diluted share) in the first quarter of 2002, a significant improvement over the first quarter 2001 net loss of $21.6 million (or $0.57 per share).

"The results from the first quarter confirm that Orbital's 'back-to-basics' strategy is clearly taking hold," said Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer. "While we are encouraged by our first quarter operating results, we remain focused on several important challenges that are still ahead of us in 2002. First, we are continuing to evaluate various options to address our convertible notes that mature in October 2002. In addition, we remain committed to an aggressive program of cost controls and cash management that we instituted last year, even as our revenues expand in 2002," Mr. Thompson added.

Financial Highlights

Summary financial results for the first quarter of 2002 as compared to the first quarter of 2001 are as follows ($ in millions, except per share data):

                                                           Three Months Ended
                                                               March 31,
                                                           2002         2001

    Revenues                                              $120.7       $94.9
    Gross Profit                                            19.9        10.6
    Operating Income (Loss)                                  5.2        (4.5)
    Income (Loss), Continuing Operations                     2.4       (22.7)
    Net Income (Loss)                                        2.4       (21.6)
    Income (Loss) Per Diluted Share, Continuing Operations  0.05       (0.60)
    Net Income (Loss) Per Diluted Share                    $0.05      $(0.57)
Revenues

Orbital's first quarter 2002 revenues rose 27%, reaching $120.7 million, up from $94.9 million in the first quarter of 2001. The company's strong revenue performance was primarily driven by substantial revenue growth in the company's launch vehicle and satellite manufacturing businesses. In the first quarter of 2002, Orbital's launch vehicle revenues were bolstered by its work on the Ground-based Midcourse Defense Boost Vehicle (DBV) missile defense contract that it was recently awarded by The Boeing Company. The company's satellite manufacturing revenues increased as a result of its work on PanAmSat and B-SAT commercial geosynchronous satellite contracts that the company won in 2001.

    Revenues by segment are as follows ($ in millions):

                                                          Three Months Ended
                                                               March 31,
                                                           2002         2001

    Launch Vehicles and Advanced Programs                 $44.7        $29.8
    Satellites and Related Space Systems                   60.8         51.7
    Electronic Systems                                     16.0         14.9
    Corporate and Other                                    (0.8)        (1.6)
         Total Revenues                                  $120.7        $94.8
Operating Income

Orbital generated operating income of approximately $5.2 million in the first quarter of 2002, a significant improvement over the operating loss of $4.5 million in the comparable quarter in 2001. Each of the company's three product segments -- launch vehicles and advanced programs, satellites and related space systems, and electronic systems for transportation management -- reported positive operating income for the quarter.

    Operating income (loss) by segment is as follows ($ in millions):

                                                          Three Months Ended
                                                               March 31,
                                                           2002         2001

    Launch Vehicles and Advanced Programs                  $4.2        $(0.5)
    Satellites and Related Space Systems                    0.1         (1.8)
    Electronic Systems                                      1.2          0.2
    Corporate and Other                                    (0.3)        (2.4)
         Total Operating Income                            $5.2        $(4.5)
Operating income for Orbital's launch vehicles and advanced programs segment increased in the first quarter of 2002 primarily as a result of the recently awarded DBV missile defense contract and the absence of costs incurred in the first quarter of 2001 related to the termination of the X-34 program. Operating income for the company's satellites and related space systems segment increased in the first quarter of 2002 primarily as a result of higher profits on geosynchronous satellite programs and the absence of goodwill amortization in 2002.

Net Income

Orbital's net income for the first quarter of 2002 was $2.4 million (or $0.05 per diluted share). The improvement over the first quarter 2001 loss from continuing operations of $22.7 million (or a loss of $0.60 per share) was primarily attributable to increased operating income, the absence of equity losses in affiliated companies, which totaled $9.7 million in the first quarter of 2001, and a $6.0 million reduction in interest expense in the first quarter of 2002 as compared to the same period in 2001.

Cash Flow and Liquidity Status

As of March 31, 2002, Orbital's available cash balance was $61.0 million. The company had negative free cash flow (defined as cash flow from operations less capital expenditures) of $22.6 million in the first quarter of 2002. In the first three months of the year, Orbital paid approximately $25.0 million of a $50.0 million vendor financing agreement. Also during the first quarter, the company received the final payment of approximately $13.0 million from NASA as settlement of the X-34 contract. In addition, during the quarter the company closed on a new $60.0 million credit facility including a new $25.0 million three-year term loan. The net proceeds from the term loan were approximately $22.4 million in the first quarter.

The following table provides summary information on the company's cash flow and debt position for the first quarter of 2002 ($ in millions):

                                                         Three Months
                                                             Ended
                                                         March 31, 2002

    Cash Used in Operating Activities                        $(18.5)
    Capital Expenditures                                       (4.1)
      Free Cash Flow                                          (22.6)

    Net Proceeds from Issuance of Long-Term Debt               22.4
    Repayment of Debt and Other                                (2.0)
      Net Decrease in Cash                                     (2.2)

    Beginning Cash Balance                                     63.2
    Ending Cash Balance                                       $61.0

    Beginning Total Debt                                     $108.4
    Ending Total Debt                                        $131.0
As previously stated, Orbital expects negative cash flow for 2002, as the company pays down its vendor financing obligation and completes certain contract-related obligations for which customers had either paid or the company had accrued for in 2001.

                   Summary Balance Sheet for March 31, 2002
                               ($ in millions)

    Assets                                Liabilities and Equity

    Cash and Equivalents         $61.0    Short-Term Debt              $101.8
    Other Current Assets         163.7    Other Current Liabilities     156.6
    Property and Equipment (Net)  89.2    Long-Term Debt                 29.2
    Goodwill (Net)               109.1    Other Non-Current Liabilities  45.5
    Other Assets                  13.1    Stockholders' Equity          103.0
         Total Assets           $436.1    Total Liabilities & Equity   $436.1
New Business Highlights

During the first quarter, Orbital received $960 million in new firm and option orders. The major contributor to the company's new contracts in the quarter was a $900 million award from Boeing to supply approximately 70 missile defense-related DBV vehicles through the end of the decade.

As a result of the new orders added during the quarter and the expiration of several contract options during the period, the company's firm backlog rose from $582 million at the end of 2001 to $850 million as of the end of the first quarter of 2002. Orbital's total backlog, which includes firm contracts as well as options, indefinite-quantity contracts and undefinitized orders, was $2.63 billion at the end of the first quarter of 2002.

Operational Highlights and Outlook

Orbital carried out four successful space missions in the first three months of the year, including the launch of two missile defense target vehicles, the launch of a NASA satellite aboard a Pegasus space launch vehicle, and the company's participation in the recent in-orbit Hubble Space Telescope servicing mission. The company currently plans to conduct another 11 to 14 space missions (depending on operational schedules) during the remainder of the year. Orbital is targeting a total of between 15 and 18 space missions to be carried out in 2002, involving four satellite deployments, 10 to 12 rocket launches, and one or two other space missions for which it provides support services and equipment.

Financial Outlook for 2002

Looking ahead to the remainder of 2002, Orbital reiterated the financial guidance it provided in March 2002 when it reported fourth quarter and year-end 2001 results. The company continues to target revenues in excess of $500 million and operating profit margins of 4 to 5% in the year ahead, based on a variety of assumptions about future events and conditions.

About Orbital

Orbital is one of the world's leading developers and manufacturers of affordable space systems for commercial, civil government and military customers. The company's primary products include low-orbit, geosynchronous and planetary spacecraft for communications, scientific and remote sensing missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense boosters that are used as target and interceptor vehicles. Orbital also offers space-related technical services to government agencies and develops and builds satellite-based transportation management systems for public transit agencies and private vehicle fleet operators.

    More information about Orbital can be found at: http://www.orbital.com
Note: "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995.

Some of the statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than those of historical facts included herein, including those related to the company's financial outlook, goals, business strategy, projected plans and objectives of management for future operations, new order trends and liquidity are forward-looking statements. Such "forward- looking statements" involve unknown risks and uncertainties that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements, expressed or implied by such forward-looking statements. Factors such as general economic and business conditions, availability of required capital for Orbital and its affiliates, continued government support and funding for key space and defense programs, the financial condition of major customers, product performance, market acceptance of products, services and technologies, consumer demand, and dependence upon long-term contracts and licensing agreements with commercial and government customers may impact the company's revenues, expenses and profit from period to period. These factors and others related to the company's business are described in further detail in the company's SEC filings, including its Form 10-K. Orbital assumes no obligation to update any such forward-looking information.

                         ORBITAL SCIENCES CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Unaudited, in thousands, except share data)

                                                    For the Quarter Ended
                                                            March 31,

                                                        2002           2001

    Revenues                                         $120,712        $94,889
    Cost of goods sold                                100,767         84,242
    Gross profit                                       19,945         10,647

    Research and development expenses                   1,706          1,667
    Selling, general and administrative expenses       13,038         11,918
    Amortization of goodwill                               --          1,575
    Income (loss) from operations                       5,201         (4,513)

    Other income, net                                     216            608
    Interest expense                                   (3,025)        (9,023)
    Allocated share of losses of affiliates                --         (9,764)
    Income (loss) before provision for income taxes     2,392        (22,692)

    Provision for income taxes                             --             --
    Income (loss) from continuing operations            2,392        (22,692)
    Income from discontinued operations                    --          1,125
    Net income (loss)                                  $2,392       $(21,567)

    Net Income (Loss) Per Share
    Basic:
      Income (loss) from continuing operations          $0.06         $(0.60)
      Income from discontinued operations                  --           0.03
      Net income (loss)                                 $0.06         $(0.57)
    Diluted:
      Income (loss) from continuing operations          $0.05         $(0.60)
      Income from discontinued operations                  --           0.03
      Net income (loss)                                 $0.05         $(0.57)


                         ORBITAL SCIENCES CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                                     March 31,    December 31,
                                                        2002           2001
    ASSETS
    Cash                                              $61,044        $63,215
    Other current assets                              163,692        161,383
         Total current assets                         224,736        224,598

    Property, plant and equipment, net                 89,204         88,795
    Goodwill                                          109,088        109,088
    Other non-current assets                           13,091         10,253
         Total Assets                                $436,119       $432,734

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Short-term borrowings                            $101,845       $103,710
    Accounts payable and accrued expenses             129,845        160,386
    Deferred revenues and other current liabilities    26,761         23,886

         Total current liabilities                    258,451        287,982

    Long-term debt                                     29,172          4,665
    Other non-current liabilities                       4,904          5,216
    Allocated losses of affiliate                      40,586         40,586
    Total stockholders' equity                        103,006         94,285
         Total Liabilities and Stockholders' Equity  $436,119       $432,734


                         ORBITAL SCIENCES CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                                                For the
                                                             Quarter Ended
                                                             March 31, 2002

    Net income                                                  $2,392
    Depreciation and amortization                                4,024
    Change in assets and liabilities                           (24,858)
      Net cash used in operating activities                    (18,442)

    Capital expenditures                                        (4,144)

    Net proceeds from issuance of long-term debt                22,364
    Repayment of debt and other                                 (1,949)
      Net cash provided by financing activities                 20,415

    Net decrease in cash                                        (2,171)

    Cash, beginning of period                                   63,215
    Cash, end of period                                        $61,044


     For More Information Contact:  Barron Beneski (703) 406-5528
                                    Public and Investor Relations
                                    beneski.barron@orbital.com

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SOURCE Orbital Sciences Corporation

CONTACT:          Barron Beneski of Orbital Sciences Corporation,
                  +1-703-406-5528, beneski.barron@orbital.com 

URL:              http://www.orbital.com 
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