DULLES, Va.April 22, 2004--

    First Quarter Financial Highlights

    --  Revenue Climbs 11% to $151 Million

    --  Operating Income Increases 51% to $14.2 Million

    --  Net Income More Than Triples to $11.5 Million

    --  Free Cash Flow Increases to $41.5 Million

    --  Earnings Per Share Reaches $0.18

Orbital Sciences Corporation (NYSE:ORB) today announced financial results for the first quarter of 2004, reporting significant improvements in revenues, operating income, net income and free cash flow(1) relative to the first quarter of 2003. The company also announced its intention to repurchase up to $50 million of the company's outstanding debt and/or equity securities over the next 12 months.

(1)"Free cash flow" is a non-GAAP financial measure discussed in this release. For additional details, please refer to the section of this press release entitled "Disclosure of Non-GAAP Financial Measures."

Orbital reported first quarter 2004 revenues of $151.4 million, up 11% over first quarter 2003 revenues of $136.7 million. First quarter operating income rose 51% to $14.2 million as compared to first quarter 2003 operating income of $9.4 million. Net income was $11.5 million, or $0.18 per diluted share, for the first quarter of the year versus $3.4 million, or $0.07 per diluted share, in the first quarter of 2003. Free cash flow was $41.5 million for the first quarter of 2004 compared to $11.2 million for the same period in 2003.

"Building on the solid financial results the company produced throughout 2003, Orbital turned in another strong quarter highlighted by growth in revenue and operating income, outstanding free cash flow generation and continued good operational progress," said Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer. "In the first quarter, we were especially pleased with increased revenues and profits in our satellite and related space systems segment, the continuation of generally solid performance by our launch vehicles segment and good progress in our transportation management systems segment."

Financial Highlights

Summary financial results for the first quarter of 2004 as compared to the first quarter of 2003 were as follows ($ in millions, except per share data):


                                             Quarter Ended March 31,
                                            2004               2003
----------------------------------------------------------------------
Revenues                                   $151.4             $136.7
Operating Income                             14.2                9.4
Net Income                                   11.5                3.4
Diluted Net Income per Share               $ 0.18             $ 0.07

Revenues

Orbital's first quarter revenues rose 11%, from $136.7 million in the first quarter of 2003 to $151.4 million in the first quarter of 2004. This increase was driven by substantial growth in the company's satellites and related space systems segment, partially offset by decreased revenues in the launch vehicles segment(2) and the transportation management systems segment. The increase in satellites and related space systems revenues is primarily attributable to higher revenues from recently awarded satellite contracts. The decrease in launch vehicles revenues is largely due to decreased revenue from the company's target vehicles product line, offset partially by increased revenue in the company's missile defense interceptor launch vehicles product line.

(2)Formerly "launch vehicles and advanced programs" segment.

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


                                             Quarter Ended March 31,
                                               2004           2003
----------------------------------------------------------------------
Launch Vehicles                              $ 76.5          $ 80.6
Satellites and Related Space Systems           69.4            48.5
Transportation Management Systems               7.3             9.2
Eliminations                                   (1.8)           (1.6)
                                             -------         -------
Total Revenues                               $151.4          $136.7

Operating Income

Orbital reported operating income of $14.2 million in the first quarter of 2004, a 51% increase over operating income of $9.4 million in the first quarter of 2003. This increase was largely attributable to higher operating income in the satellites and related space systems segment, improved transportation management systems results and a $2.5 million non-recurring gain on the sale of notes receivable, offset partially by lower operating income in the launch vehicles segment. The increase in satellites and related space systems operating income was largely due to higher income from several existing and recently awarded satellite contracts. The improvement in transportation management systems operating income was mainly attributable to the absence in 2004 of cost increases on certain contracts and litigation expenses recorded in the first quarter of 2003. The $2.5 million non-recurring gain, recorded as a credit to settlement expense in the first quarter of 2004, resulted from the sale of notes that the company had received from its former affiliate, Orbital Imaging Corporation. The decrease in launch vehicles operating income was primarily attributable to an unfavorable profit adjustment stemming from technical issues and schedule delays on a Taurus rocket contract.

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


                                              Quarter Ended March 31,
                                                2004           2003
----------------------------------------------------------------------
Launch Vehicles                                $ 6.9           $9.2
Satellites and Related Space Systems             4.5            2.7
Transportation Management Systems                0.3           (1.5)
Corporate and Other                              2.5           (1.0)
                                               ------         ------
Total Operating Income                         $14.2           $9.4

Net Income

Orbital's first quarter net income was $11.5 million, or $0.18 per diluted share, compared to net income of $3.4 million, or $0.07 per diluted share, in the first quarter of 2003. This increase in net income was due to the $4.8 million increase in operating income discussed above, together with a $3.2 million decrease in interest expense in the first quarter of 2004. The decrease in interest expense is the result of a reduction in the interest rate on the company's long-term debt and lower amortization of debt costs resulting from refinancing transactions in 2003.

Cash Flow and Balance Sheet

As of March 31, 2004, Orbital's unrestricted cash balance was $106.2 million. The company had positive free cash flow of $41.5 million in the first quarter of 2004. Approximately $25.4 million of the positive free cash flow was attributable to advanced payments received from customers, resulting in an increase in deferred revenues on the balance sheet.

The following summarizes the company's cash flow for the first quarter of 2004 ($ in millions):


                                                  First Quarter 2004
----------------------------------------------------------------------
Net Cash Provided by Operating Activities               $ 44.1
Capital Expenditures                                      (2.6)
                                                        -------
   Free Cash Flow                                         41.5
Reduction in Cash Restricted for Letters of Credit         1.6
Proceeds from Issuance of Common Stock                     2.2
                                                        -------
   Net Increase in Cash                                   45.3
Beginning Cash Balance                                    60.9
                                                        -------
Ending Cash Balance                                     $106.2



Summary balance sheet data as of March 31, 2004 is as follows
($ in millions):

           Assets                      Liabilities and Equity
----------------------------------------------------------------------
Cash and Equivalents    $106.2    Short-Term Debt                $ 0.3
Other Current Assets     179.3    Other Current Liabilities      156.1
Property and Equipment    81.4    Long-Term Debt                 137.6
Goodwill                  95.3    Other Non-Current Liabilities    2.4
Other Assets              14.1    Stockholders' Equity           179.9
                        -------                                 ------
   Total Assets         $476.3    Total Liabilities and Equity  $476.3

New Business Highlights

During the first quarter of 2004, Orbital booked approximately $70 million in new firm and option contracts. In addition, the company received approximately $65 million of option exercises under existing contracts. At March 31, 2004, the company's firm backlog was approximately $943 million and its total backlog (including options, indefinite-quantity contracts and undefinitized orders) was approximately $2.43 billion.

Operational Highlights

Orbital successfully carried out two major space systems missions in the first quarter of 2004. In January, Orbital conducted the third successful launch of the company's Orbital Boost Vehicle (OBV) interceptor in support of the U. S. Missile Defense Agency's Ground-based Midcourse Defense system. Orbital's Hyper-X hypersonic research launcher, which the company developed for NASA, also performed its first successful mission in March.

In the second quarter, Orbital is planning to carry out five space missions and an additional nine major product deliveries. The second quarter operational schedule includes the launch of a Taurus rocket carrying a satellite for the National Space Program of the Republic of China, the fourth launch of the OBV interceptor, several additional OBV deliveries, a group of scientific satellite deliveries and the launch of three target launch vehicles.

2004 Guidance Update

Orbital is forecasting full-year 2004 revenues to be in the range of $660 to $670 million and operating income margin in the range of 7% to 8% of revenues. Free cash flow is forecasted to be in the range of $40 to $50 million. In addition, the company may receive up to $22 million in cash proceeds from the exercise of common stock warrants that expire this year. Based on estimated average diluted shares of 66 to 67 million, Orbital anticipates that its 2004 diluted earnings per share will be in the range of $0.60 to $0.65.

The following table summarizes the company's updated and previous guidance for 2004:


                              Updated Guidance    Previous Guidance
                               (April 2004)        (February 2004)
----------------------------------------------------------------------
Revenue (millions)              $660 to 670           $640 to 660
Operating Income Margin          7.0 to 8.0%          7.0 to 8.0%
Diluted Earnings per Share      $0.60 to 0.65         $0.55 to 0.65
Average Diluted Shares
 (millions)                       66 to 67               66 to 67
Free Cash Flow (millions)        $40 to 50              $30 to 40

Securities Repurchase Program

In April 2004, Orbital's Board of Directors authorized the purchase of up to $50 million of the company's outstanding debt and/or equity securities over the next 12 months. The company may repurchase its 9% senior notes due 2011, common stock or common stock warrants that expire in 2006, or a combination thereof. Shares of common stock may be purchased from time to time in open market, block purchase or negotiated transactions. The warrants and notes may be purchased in negotiated transactions. The timing, amount and type of securities to be repurchased will be determined based on the company's loan covenants, market conditions and other factors. The following outstanding securities are subject to the repurchase program: $135 million of 9% senior notes due 2011; approximately 48.7 million shares of common stock; and approximately 135,000 warrants to purchase approximately 16.5 million shares of common stock with an exercise price of $3.86 per share that expire in 2006.

Disclosure of Non-GAAP Financial Measures

The company uses a non-GAAP (Generally Accepted Accounting Principles) financial measure, free cash flow, within this press release. Orbital does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define this measure differently. Free cash flow is defined as GAAP net cash provided by operating activities (the most directly comparable GAAP financial measure) less capital expenditures for property, plant and equipment. Management believes that free cash flow provides investors with an important perspective on the company's liquidity, financial flexibility and ability to fund operations and service debt.

About Orbital

Orbital develops and manufactures small space and rocket systems for commercial, military and civil government customers. The company's primary products are satellites and launch vehicles, including low-orbit, geosynchronous and planetary spacecraft for communications, remote sensing, scientific and defense missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target 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.

A transcript of the earnings teleconference call will be available on Orbital's website at http://www.orbital.com/Investor

"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. 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 continued government support and funding for key space and defense programs, product performance and market acceptance of products and technologies, as well as other risk factors and business considerations described in the company's SEC filings, including the annual report on Form 10-K, as amended, could impact Orbital's actual financial and operational results. Orbital assumes no obligation for updating the information contained in this press release.


                     Orbital Sciences Corporation
            Condensed Consolidated Statements of Operations
           (Unaudited, in thousands, except per share data)

                                              For the Quarter Ended
                                                     March 31,
                                               2004           2003
----------------------------------------------------------------------
Revenues                                     $151,372       $136,681
Costs of goods sold                           126,454        110,447
                                             ---------      ---------
Gross profit                                   24,918         26,234
Research and development expenses               1,742          1,582
Selling, general and administrative expenses   11,509         14,265
Settlement expense (income)                    (2,538)         1,000
                                             ---------      ---------
Income from operations                         14,205          9,387
Other income, net                                 426            117
Interest expense                               (2,909)        (6,068)
                                             ---------      ---------
Income before provision for income taxes       11,722          3,436
Provision for income taxes                       (228)            --
                                             ---------      ---------
Net income                                    $11,494        $ 3,436
                                             =========      =========

Basic net income per share                     $ 0.24         $ 0.08
                                             =========      =========
Diluted net income per share                   $ 0.18         $ 0.07
                                             =========      =========
Shares used in computing basic net
 income per share                              48,048         45,753
Shares used in computing diluted net
 income per share                              65,370         51,123




                     Orbital Sciences Corporation
                 Condensed Consolidated Balance Sheets
                            (In thousands)

                                    March 31,            December 31,
                                     2004                    2003
----------------------------------------------------------------------

Assets                            (Unaudited)
Cash                               $106,173                $ 60,900
Receivables, net                    144,825                 149,508
Inventory                            12,626                  12,642
Other current assets                 21,889                  24,754
                                   ---------               ---------
   Total current assets             285,513                 247,804
Property, plant and equipment,
 net                                 81,364                  82,364
Goodwill                             95,293                  95,293
Other non-current assets             14,100                  13,839
                                   ---------               ---------
   Total Assets                    $476,270                $439,300
                                   =========               =========

Liabilities and Stockholders' Equity

Short-term borrowings                 $ 301                   $ 297
Accounts payable and accrued
 expenses                           114,303                 116,026
Deferred revenues                    41,739                  16,292
                                   ---------               ---------
   Total current liabilities        156,343                 132,615
Long-term debt                      137,588                 137,116
Other non-current liabilities         2,395                   2,692
Total stockholders' equity          179,944                 166,877
                                   ---------               ---------
   Total Liabilities and
    Stockholders' Equity           $476,270                $439,300
                                   =========               =========



                     Orbital Sciences Corporation
            Condensed Consolidated Statements of Cash Flows
                       (Unaudited, in thousands)

                              For the Quarter         For the Quarter
                                   Ended                  Ended
                              March 31, 2004          March 31, 2003
----------------------------------------------------------------------

Net income                       $ 11,494                 $ 3,436
Depreciation and amortization       3,652                   3,893
Amortization of debt costs            234                   1,772
Changes in assets and liabilities  29,460                   3,379
Other                                (678)                    380
                                 ---------               ---------
Net cash provided by operating
 activities                        44,162                  12,860
Capital expenditures               (2,628)                 (1,660)
Change in cash restricted for
 letters of credit                  1,567                      --
                                 ---------               ---------
Net cash used in investing
 activities                        (1,061)                 (1,660)
Repayment of debt and other           (69)                   (491)
Net proceeds from issuance of
 common stock                       2,241                     226
                                 ---------               ---------
Net cash provided by (used in)
 financing activities               2,172                    (265)
                                 ---------               ---------
Net increase in cash               45,273                  10,935
Cash, beginning of period          60,900                  43,440
                                 ---------               ---------
Cash, end of period              $106,173                $ 54,375
                                 =========               =========

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

    SOURCE: Orbital Sciences Corporation