Adjusted net income* was
Mr.
________
* “Adjusted net income,” “adjusted diluted earnings per share” and “free cash flow” are non-GAAP financial measures. For additional details, please refer to the sections of this press release entitled “Cash Flow” and “Disclosure of Non-GAAP Financial Measures.”
Financial Highlights
Summary financial results for the first quarter were as follows:
First Quarter | |||||||
(in millions, except per share data) | 2009 | 2008 | |||||
Revenues | $ | 295.7 | $ | 283.5 | |||
Operating Income | 11.2 | 20.0 | |||||
Income from Continuing Operations | 9.2 | 12.1 | |||||
Net Income | 9.2 | 13.0 | |||||
Adjusted Net Income | 9.9 |
(1) |
n/a | ||||
Diluted Earnings per Share: | |||||||
Continuing Operations | $ | 0.16 | $ | 0.20 | |||
Net Income | 0.16 | 0.21 | |||||
Adjusted Net Income | 0.17 |
(1) |
n/a | ||||
_________________________ | |||||||
(1) Adjusted to exclude a $0.7 million investment impairment charge in the first quarter of 2009. See "Disclosure of Non-GAAP Financial Measures" below. |
Revenues increased
Operating income decreased
Several non-operating factors also impacted the company’s first quarter
2009 financial results, including a
Orbital’s effective income tax rate decreased to 33.7% in the first quarter of 2009 compared to 40.4% in the first quarter of 2008. The lower tax rate was primarily due to an increase in tax credits in 2009 related to research and development programs.
Net income for the first quarter of 2009 was
Segment Results
Operating results by segment were as follows:
Launch Vehicles
First Quarter |
|||||||||||
($ in millions) | 2009 | 2008 | % Change | ||||||||
Revenues | $ | 119.2 | $ | 105.3 | 13 | % | |||||
Operating Income | 4.3 | 7.6 | (43 | %) | |||||||
Operating Margin | 3.6 | % | 7.2 | % |
Launch vehicles segment revenues increased
________
* This is a non-GAAP financial measure calculated by adding back the
unrecoverable research and development expenses of
Satellites and Space Systems
First Quarter |
|||||||||||
($ in millions) | 2009 | 2008 | % Change | ||||||||
Revenues | $ | 110.2 | $ | 106.4 | 4 | % | |||||
Operating Income | 7.8 | 7.9 | (1 | %) | |||||||
Operating Margin | 7.1 | % | 7.4 | % |
Satellites and space systems segment revenues increased
Advanced Space Programs
First Quarter |
|||||||||||
($ in millions) | 2009 | 2008 | % Change | ||||||||
Revenues | $ | 68.3 | $ | 72.6 | (6 | %) | |||||
Operating Income (Loss) | (0.9 | ) | 4.8 | (119 | %) | ||||||
Operating Margin |
(1.3% |
) |
6.6 | % |
Advanced space programs segment revenues decreased
Cash Flow
Cash flow for the first quarter of 2009 was as follows:
|
First Quarter |
|||
(in millions) |
|
2009 |
||
Net Cash Provided by Operating Activities | $ | 16.1 | ||
Capital Expenditures | (5.9 | ) | ||
Free Cash Flow | 10.2 | |||
Repurchase of Common Stock | (14.6 | ) | ||
Proceeds from Issuance of Common Stock and Other | 0.6 | |||
Net Decrease in Cash | (3.8 | ) | ||
Beginning Cash Balance | 328.3 | |||
Ending Cash Balance | $ | 324.5 |
Free cash flow was
New Business Highlights
During the first quarter of 2009, Orbital received approximately
Operational Highlights
In the first quarter of 2009, Orbital successfully deployed the NSS-9
commercial communications satellite for SES New Skies. The satellite has
completed its in-orbit testing and is now providing commercial services
for SES New Skies. Orbital delivered eight additional systems for future
missions, including the Optus D3 communications satellite, a Minotaur I
space launch vehicle for the TacSat-3 mission currently scheduled for
early May, an Orbital Boost Vehicle interceptor for the Ground-based
Midcourse Defense system, one missile defense-related target and four
Coyote supersonic naval target missiles. In February, Orbital’s Taurus
XL rocket, carrying the company-built
For the remainder of 2009, Orbital expects to carry out between 15 and 18 other major space missions and rocket launches and to complete and deliver an additional 12 to 15 systems for future deployments.
2009 Financial Guidance
The company updated its financial guidance for full-year 2009 as follows:
Current | Previous | |||||
Revenues (in millions) | $1,150 - $1,175 | $1,150 - $1,175 | ||||
Operating Income Margin | 5.25% - 5.5% | 6.0% - 6.25% | ||||
Diluted Earnings per Share | $0.68 - $0.75 | $0.75 - $0.82 | ||||
Free Cash Flow (in millions) | $65 - $75 | $65 - $75 |
The current and previous earnings per share guidance reflects the
adoption of the new accounting standard discussed above. As a result of
the new accounting standard, the company will record
Orbital has lowered its 2009 operating income margin and earnings per
share guidance primarily as a result of several events that occurred in
the first quarter of 2009 as discussed above. These included cost
increases on two advanced space programs segment contracts, legal fees
incurred in connection with the CRS contract protest and cost increases
in the launch vehicles segment as a result of the Taurus XL launch
failure. In addition, the company recorded a
Disclosure of Non-GAAP Financial Measures
Free cash flow is defined as GAAP (Generally Accepted Accounting Principles) net cash provided by operating activities (the most directly comparable GAAP financial measure) less capital expenditures for property, plant and equipment. A quantitative reconciliation of free cash flow to net cash provided by 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 this 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.
Adjusted net income for 2009 is defined as GAAP net income (the most directly comparable GAAP financial measure) adjusted to exclude an investment impairment charge. Adjusted diluted earnings per share is equal to adjusted net income divided by diluted shares. These measures are provided so investors can more easily compare 2009 operating results to 2008 operating results. The reconciliation of these financial measures is as follows:
(in millions, except per share data) |
Quarter Ended March 31, 2009 |
||||
Reported Net Income | $ | 9.2 | |||
Add Investment Impairment Charge | 0.7 | ||||
Adjusted Net Income |
$ |
9.9 | |||
Adjusted Diluted Earnings Per Share | $ | 0.17 |
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 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; and missile defense systems that are used as interceptor and target vehicles. Orbital also provides satellite subsystems and space-related technical services to government agencies and laboratories.
“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, new product development programs, product
performance and market acceptance of products and technologies,
government contract procurement and termination risks, 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.
ORBITAL SCIENCES CORPORATION |
||||||||
Condensed Consolidated Income Statements |
||||||||
(in thousands, except per share data) |
||||||||
First Quarter | ||||||||
2009 | 2008* | |||||||
Revenues | $ | 295,741 | $ | 283,545 | ||||
Cost of revenues | 246,348 | 234,682 | ||||||
Research and development expenses | 18,971 | 8,204 | ||||||
Selling, general and administrative expenses | 19,258 | 20,668 | ||||||
Income from operations | 11,164 | 19,991 | ||||||
Investment impairment charge | (700 | ) | - | |||||
Interest income and other | 5,663 | 2,386 | ||||||
Interest expense | (2,257 | ) | (2,134 | ) | ||||
Income before income taxes | 13,870 | 20,243 | ||||||
Income taxes | (4,668 | ) | (8,181 | ) | ||||
Income from continuing operations | 9,202 | 12,062 | ||||||
Income from discontinued operations, net of taxes | - | 949 | ||||||
Net income | $ | 9,202 | $ | 13,011 | ||||
Basic income per share: | ||||||||
Continuing operations | $ | 0.16 | $ | 0.20 | ||||
Discontinued operations | - | 0.02 | ||||||
Net income | 0.16 | 0.22 | ||||||
Diluted income per share: | ||||||||
Continuing operations | $ | 0.16 | $ | 0.20 | ||||
Discontinued operations | - | 0.02 | ||||||
Net income | 0.16 | 0.21 | ||||||
Shares used in computing basic income per share | 57,189 | 58,495 | ||||||
Shares used in computing diluted income per share | 57,853 | 59,803 | ||||||
_________________________ | ||||||||
* The company’s first quarter 2008 financial statements have been adjusted to record $1.1 million of additional interest expenses required by a new accounting standard pertaining to the company’s convertible debt. |
ORBITAL SCIENCES CORPORATION |
||||||||
Segment Information |
||||||||
(in millions) |
||||||||
First Quarter | ||||||||
2009 | 2008 | |||||||
Revenues: | ||||||||
Launch Vehicles | $ | 119.2 | $ | 105.3 | ||||
Satellites and Space Systems | 110.2 | 106.4 | ||||||
Advanced Space Programs | 68.3 | 72.6 | ||||||
Eliminations | (2.0 | ) | (0.8 | ) | ||||
Total Revenues | $ | 295.7 | $ | 283.5 | ||||
Income from Operations: | ||||||||
Launch Vehicles | $ | 4.3 | $ | 7.6 | ||||
Satellites and Space Systems | 7.8 | 7.9 | ||||||
Advanced Space Programs | (0.9 | ) | 4.8 | |||||
Eliminations | - | (0.3 | ) | |||||
Total Income from Operations | $ | 11.2 | $ | 20.0 | ||||
ORBITAL SCIENCES CORPORATION |
||||||
Condensed Consolidated Balance Sheets |
||||||
(in thousands) |
||||||
March 31, | December 31, | |||||
2009 | 2008* | |||||
Assets | ||||||
Cash | $ | 324,495 | $ | 328,307 | ||
Receivables, net | 211,791 | 203,111 | ||||
Inventory | 38,907 | 33,434 | ||||
Deferred income taxes, net | 37,090 | 35,368 | ||||
Other current assets | 10,037 | 8,951 | ||||
Total current assets | 622,320 | 609,171 | ||||
Non-current investments | 14,700 | 16,700 | ||||
Property, plant and equipment, net | 106,910 | 104,880 | ||||
Goodwill | 55,551 | 55,551 | ||||
Deferred income taxes, net | 57,573 | 63,206 | ||||
Other non-current assets | 14,187 | 4,387 | ||||
Total Assets | $ | 871,241 | $ | 853,895 | ||
Liabilities and Stockholders’ Equity | ||||||
Accounts payable and accrued expenses | $ | 177,843 | $ | 179,658 | ||
Deferred revenues and customer advances | 100,402 | 80,059 | ||||
Total current liabilities | 278,245 | 259,717 | ||||
Long-term debt | 116,576 | 115,372 | ||||
Other non-current liabilities | 7,262 | 5,700 | ||||
Total stockholders’ equity | 469,158 | 473,106 | ||||
Total Liabilities and Stockholders’ Equity | $ | 871,241 | $ | 853,895 | ||
_________________________ | ||||||
* The company’s 2008 financial statements have been adjusted as required by a new accounting standard pertaining to the company’s convertible debt. |
ORBITAL SCIENCES CORPORATION |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands) |
||||||||
First Quarter | ||||||||
2009 | 2008* | |||||||
Net income | $ | 9,202 | $ | 13,011 | ||||
Impairment of non-current investments | 700 | - | ||||||
Depreciation | 4,876 | 4,535 | ||||||
Deferred taxes | 4,046 | 7,365 | ||||||
Changes in assets and liabilities | (6,595 | ) | (3,617 | ) | ||||
Other | 3,837 | 3,255 | ||||||
Net cash provided by operating activities | 16,066 | 24,549 | ||||||
Capital expenditures | (5,897 | ) | (6,736 | ) | ||||
Net cash used in investing activities | (5,897 | ) | (6,736 | ) | ||||
Repurchase of common stock | (14,580 | ) | (11,781 | ) | ||||
Net proceeds from issuance of common stock | 529 | 1,656 | ||||||
Other | 70 | 743 | ||||||
Net cash used in financing activities | (13,981 | ) | (9,382 | ) | ||||
Net (decrease) increase in cash | (3,812 | ) | 8,431 | |||||
Cash, beginning of period | 328,307 | 235,822 | ||||||
Cash, end of period | $ | 324,495 | $ | 244,253 | ||||
_________________________ | ||||||||
* The company’s 2008 financial statements have been adjusted as required by a new accounting standard pertaining to the company’s convertible debt. |
Source:
Orbital Sciences Corporation
Barron Beneski, 703-406-5528
Public
and Investor Relations
beneski.barron@orbital.com