DULLES, Va., Aug. 8 /PRNewswire/ -- Orbital Sciences Corporation (NYSE: ORB) today announced its second quarter 2000 financial results, reporting a net loss before special charges that was in line with the company's target. New orders, contract backlog and cash flow met or exceeded plans for the quarter, but revenue growth and operating margins were lower than anticipated for the period.
Orbital's total enterprise revenue in the second quarter of 2000 was $243,078,000 (including revenues from its unconsolidated ORBCOMM and ORBIMAGE affiliates and ORBNAV subsidiary), up 4% from second quarter 1999 enterprise revenue of $234,339,000. Earnings before interest, taxes, depreciation, amortization and equity adjustments (EBITDA) in the second quarter of 2000 were $11,335,000 compared to $20,932,000 in the second quarter of 1999, a 46% decrease. The company reported a $1,185,000 operating loss in the second quarter compared to $6,508,000 of operating income in the comparable 1999 quarter. Primarily as a result of continued start-up losses and an inventory write-down in the company's satellite services businesses and an $11,500,000 litigation settlement charge, the company reported a net loss of $42,129,000 (or $1.13 per share) in this year's second quarter as compared to a net loss of $26,071,000 (or $0.70 per share) last year.
The Company's consolidated quarterly results are summarized below:
June 30, June 30, Percent 2000 1999 Change Enterprise Revenue $243,078,000 $234,339,000 +4% Consolidated Revenue 231,475,000 226,484,000 +2% Gross Profit 43,983,000 49,254,000 -11% EBITDA 11,335,000 20,932,000 -46% Operating Income (Loss) (1,185,000) 6,508,000 N/A Net Income (Loss) (42,129,000) (26,071,000) N/A Loss Per Share (1.13) (0.70) N/A Firm Backlog 2,027,000,000 2,080,000,000 -3% Total Backlog $5,025,000,000 $4,304,000,000 17%
Significant strategic, operational and new business highlights from recent months were as follows:
Orbital's space and ground infrastructure business booked approximately $445 million of new orders in the second quarter, increasing total contract backlog (including options) by 17% to nearly $5.03 billion, a new company record.
Orbital carried out five successful space missions in the last three months, bringing its total operational experience to 300 space missions since the company's founding in 1982.
Orbital's Canadian subsidiary, MacDonald Dettwiler and Associates Ltd. (MDA), successfully completed its initial public offering, raising new capital partly to fund the continued expansion of MDA's e-commerce initiative in online land information services in the United States, Canada and the United Kingdom.
ORBCOMM, Orbital's satellite-based wireless data communications service affiliate, revised its business plan and began to implement corresponding changes to its organization and financial structure. ORBCOMM reported total demand of about 242,000 subscriber units in service or on order at the end of the second quarter.
ORBIMAGE, Orbital's satellite-based Earth imaging service affiliate, progressed with the scheduled launches of its first two high-resolution digital photography satellites in the spring and summer of 2001.
Details of Orbital's financial results for the second quarter of 2000 are provided below for each of the company's three business sectors:
Space and Ground Infrastructure Systems
Orbital's space and ground infrastructure systems sector, including satellites and other space systems, launch vehicles, electronics and sensors, and ground systems and land information services, reported revenue of $202,041,000 in the second quarter, an increase of approximately 4% from last year's second quarter revenue of $195,190,000. Infrastructure systems produced operating income (after allocation of corporate costs) of $512,000 in the quarter compared to operating income of $10,711,000 this time last year. EBITDA in the second quarter of 2000 was $8,496,000 compared to $20,569,000 in the same quarter of 1999.
June 30, June 30, 2000 1999 Revenue $202,041,000 $195,190,000 EBITDA 8,496,000 20,569,000 Operating Income 512,000 10,711,000
Infrastructure systems gross margins declined in the quarter due to cost increases on several satellite construction contracts and the company's X-34 rocket program, while SG&A; expenses increased due to acquisition-related expenses at MDA and higher corporate accounting, overhead and other costs.
During the last three months, Orbital carried out five successful space missions, bringing its record to 88 consecutive successful rocket launches, satellite deployments and space payload operations over the past 42 months. Recent missions included three rocket launches, one satellite deployment and one space robotics mission. During the remainder of 2000, the company is currently planning to conduct an additional seven or eight space missions.
Satellite Access Products
Orbital's satellite access products sector, consisting of its Magellan subsidiary's satellite navigation, positioning and communications products, reported revenue of $25,667,000 in the second quarter compared to second quarter 1999 revenue of $26,775,000. This sector reported an operating loss (after allocation of corporate costs) of $2,166,000 in the second quarter compared to an operating loss of $2,622,000 this time last year. The satellite access products sector reported EBITDA in the second quarter of 2000 of $589,000 compared to EBITDA of $1,164,000 in the same period last year.
June 30, June 30, 2000 1999 Revenue $25,667,000 $26,775,000 EBITDA 589,000 1,164,000 Operating Income (Loss) (2,166,000) (2,622,000)
During the second quarter of 2000, Magellan built and shipped approximately 107,000 consumer and industrial satellite navigation products. Additionally, the company completed development and began customer shipments of several new products, including a navigation accessory for the popular Palm(TM) V organizer that provides location-based data for a variety of mobile applications. Earlier in the year, Magellan received a "launch order" from Rand McNally & Company for 25,000 of these Palm-compatible GPS units.
Orbital's satellite services sector consists of its unconsolidated ORBCOMM and ORBIMAGE affiliates and ORBNAV subsidiary and its consolidated RSI subsidiary. Satellite services enterprise revenue, including the revenue of its ORBCOMM and ORBIMAGE affiliates and ORBNAV subsidiary, totaled $15,370,000 in the second quarter compared to revenue of $12,374,000 in the comparable quarter of 1999. Total sector EBITDA (after allocation of corporate costs) was $771,000 in the quarter compared to an EBITDA loss of $802,000 this time last year.
June 30, June 30, 2000 1999 Revenue $15,370,000 $12,374,000 EBITDA (Loss) 771,000 (802,000) Operating Income (Loss) 470,000 (1,581,000)
ORBCOMM recently revised its business approach and began to implement new operational and financial plans to reduce its capital requirements over the next several years. ORBCOMM obtained $17 million of short-term interim funding, but still must secure significant longer-term capital in the near future. ORBCOMM increased its total subscriber units in service or on order to about 242,000 units at the end of June from 239,000 units at the end of March. Its installed subscriber base expanded by about 20% to approximately 31,000 units in service at the end of the second quarter.
Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer, said, "Orbital's second quarter financial results reflected steady progress in our rebuilding campaign after the setbacks the company experienced in 1999. While revenue growth and operating margins were below plan, new order bookings, contract backlog and free cash flow were consistent with or better than estimates for the period. Losses before the unanticipated special charges were also in line with second-quarter targets."
"Orbital's operational performance remained solid in the quarter, with five successful space missions carried out in the last three months. Our infrastructure groups reported strong new order rates in the June quarter and appear to have good prospects for additional bookings for the rest of 2000, supporting a target of about 10% revenue growth for the year as a whole," he added.
"ORBCOMM revised its business plan during the past several months to refocus its marketing, distribution and operational activities. It implemented organizational and financial changes, including staff reductions and capital investment deferrals. Even so, the new plan is not without risks. A great deal of work still remains to be done by ORBCOMM over the coming months, including completing a significant private equity financing, addressing its public debt, and maintaining the confidence of its customers and business partners," Mr. Thompson concluded.
Orbital is a space and information systems company that designs, manufactures, operates and markets a broad range of affordable space infrastructure systems, satellite access products and satellite services, including satellites and other space systems, launch vehicles, electronics and sensors, satellite ground systems and land information services, satellite- based navigation and communications products, and satellite-delivered communications, Earth imaging and other information services.
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SOURCE Orbital Sciences Corporation
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