DULLES, Va., Nov. 7 /PRNewswire/ -- Orbital Sciences Corporation (NYSE: ORB) today announced financial results for the third quarter of 2001, reporting net income of $5.6 million, or $0.15 earnings per share, compared to a third quarter 2000 net loss of $121.3 million, or $3.23 loss per share. The company's third quarter 2001 earnings include a net gain of $21.9 million from the sale of non-core business units completed in July and September, offset in part by $13.9 million for excess facility reserves, employee severance and other nonrecurring charges. Revenues for the third quarter were $91.0 million, up about 14% from comparable revenues in the same period last year.
"In the third quarter, Orbital accomplished three noteworthy actions in our 'back-to-basics' strategy. First, the company continued to build higher- margin contract backlog in its core space technology product lines at a healthy rate. In the last few months, we booked several significant new orders in our two major growth areas, suborbital launch vehicles and small communications satellites," said Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer.
"Second, we accelerated our efforts to aggressively reduce operating and overhead costs, which we expect will translate into improved financial results in future quarters. Finally, we completed three major non-core business unit divestitures, allowing the company to further reduce debt and strengthen its financial position in the September quarter," Mr. Thompson added.
Summary financial results for the third quarter of 2001 as compared to the third quarter of 2000 are as follows ($ in millions, except per share data):
Three Months Ended September 30 2001 2000 Consolidated Revenues $ 91.0 $ 80.1 Operating Income (Loss) (16.9) (82.7) Net Income (Loss) From Continuing Operations (16.3) (152.0) Net Income (Loss) 5.6 (121.3) Net Income (Loss) Per Share 0.15 (3.23)
Orbital's third quarter 2001 revenues were $91.0 million, approximately 14% higher than the $80.1 million recorded in the same period last year. The company experienced revenue increases in all operating groups (Space Systems, Launch Systems and Electronic Systems Groups), with the exception of its Advanced Programs Group, which saw a revenue decline due to NASA's termination for convenience of the X-34 reusable launch vehicle program earlier this year.
Orbital's loss from operations for the third quarter of 2001 was $16.9 million, including approximately $13.9 million in nonrecurring charges, as compared to an operating loss of $82.7 million in the third quarter of 2000. The third quarter of last year included a one-time $54.8 million charge to write down the company's ORBCOMM-related accounts receivable and inventory.
Net Loss From Continuing Operations
The company reported a net loss from continuing operations of $16.3 million, or $0.42 per share, in the third quarter of 2001 as compared to a net loss of $152.0 million, or $4.05 per share, from continuing operations in the same period in 2000. In addition to the $54.8 million charge discussed above, the third quarter 2000 results included a one-time $50.6 million charge to write off the company's remaining investment in ORBCOMM.
Orbital's net income for the third quarter of 2001 was $5.6 million, or $0.15 per share, as compared to a net loss of $121.3 million, or $3.23 per share, in the same quarter last year. Included in this year's third quarter net income was a $21.9 million gain on the sale of non-core business units as compared to a similar $30.7 million gain in the third quarter of 2000.
New Business Highlights
During the third quarter of 2001, Orbital received new firm orders for its space technology products valued at approximately $142 million. As a result, after eliminating backlog associated with its Sensor Systems Division which was sold in September, the company's firm contract backlog was approximately $507 million and its total contract backlog (including options, indefinite- quantity contracts and undefinitized orders) was about $2.52 billion at the end of the quarter.
Major new contracts added to backlog during the third quarter included the following:
Orbital was selected by BSAT Corporation of Japan to build and launch its BSAT-2c direct-broadcast satellite, in a contract valued at approximately $70 million. BSAT awarded this contract to Orbital on a sole-source basis after its BSAT-2b satellite, also manufactured by the company, was lost in an Ariane 5 launch vehicle failure in July.
The company was selected by the U.S. Army for a $24 million contract to develop and produce short-range air-launched target vehicles for theater missile defense testing, and by the U.S. Air Force for a $9 million addition to an existing contract to build and launch long- range target vehicles for the national missile defense program.
Orbital was also awarded a $21 million contract by the Army to develop and test a liquid propellant booster system for future target vehicle applications.
Recent operational events include the following:
The company's Taurus rocket failed in its late September launch attempt to place the Orbital-built OrbView-4 and QuikTOMS satellites into orbit. An investigation into the cause of the failure is nearing completion, with launches of other company rockets planned to resume in December. Orbital has more than 45 space and suborbital launch vehicles under contract for deliveries through 2004.
In the third quarter, Orbital completed and shipped the NSTAR-c geosynchronous communications satellite platform, which is currently scheduled to be launched next spring for NTT DoCoMo of Japan. The company also made good progress in its design and manufacturing work on an additional 15 communications, scientific and defense satellites it currently has under contract.
The company continued its year-long campaign of across-the-board cost reductions to improve operational efficiency, profit margins and free cash flow. These measures have reduced its core workforce by about 18% and cut related facility and overhead expenses by nearly 25% since the fall of 2000, while workforce revenue productivity has increased more than 23% during the same period.
Fourth Quarter 2001 and Preliminary 2002 Outlook
Commenting on the remainder of 2001, Mr. Thompson added, "With market interest in our suborbital rockets and smaller GEO satellites at an all-time high, Orbital aims to add substantial new profitable orders to our backlog in the fourth quarter. As a result of the completion of several loss contracts as well as major cost reductions implemented during the past year, we also anticipate significant improvements in profit margins in the next three months, along with healthy increases in revenue in our core space product lines."
Looking ahead to 2002, Mr. Thompson indicated that Orbital currently expects to generate increased revenues and improved operating income compared to 2001 results. The company will also continue its efforts to bolster liquidity and financial flexibility through replacing or refinancing its remaining debt obligations. "With a solid higher-margin backlog, a more efficient cost structure and a strengthened balance sheet, we should be well- positioned to build shareholder value in 2002 and beyond," he concluded.
Orbital develops and manufactures affordable space systems, including satellites, launch vehicles, electronics and advanced space systems. Orbital is also involved with satellite-based networks that provide wireless data communications and high-resolution Earth imagery to customers around the world.
|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, 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/A. 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 September 30, 2001 2000 Revenues $91,008 $80,073 Costs of goods sold 78,816 84,973 Gross Profit 12,192 (4,900) Research and development expenses 2,060 2,690 Selling, general and administrative expenses 25,549 18,871 Amortization of goodwill 1,503 1,449 Provision for doubtful ORBCOMM accounts -- 54,750 Loss from operations (16,920) (82,660) Other income (expense), net 3,683 (27) Interest expense, net of capitalized interest (3,041) (8,413) Allocated share of losses of affiliates -- (51,039) Loss before provision for income taxes (16,278) (142,139) Provision for income taxes -- 9,886 Loss from continuing operations (16,278) (152,025) Income from discontinued operations 21,895 30,703 Net income (loss) $5,617 $(121,322) Net income (loss) per common and dilutive share: Loss from continuing operations $(0.42) $(4.05) Income from discontinued operations 0.57 0.82 Net income (loss) $0.15 $(3.23) ORBITAL SCIENCES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except share data)
For the Nine Months Ended September 30, 2001 2000 Revenues $294,386 $312,657 Costs of goods sold 264,949 289,932 Gross Profit 29,437 22,725 Research and development expenses 6,281 7,520 Selling, general and administrative expenses 48,561 46,766 Amortization of goodwill 4,519 4,348 Provision for doubtful ORBCOMM accounts -- 54,750 Loss from operations (29,924) (90,659) Other income (expense), net 4,663 2,390 Interest expense, net of capitalized interest (18,851) (18,633) Allocated share of losses of affiliates (19,995) (94,290) Litigation settlement -- (11,500) Loss before provision for income taxes (64,107) (212,692) Provision for income taxes -- 9,886 Loss from continuing operations (64,107) (222,578) Income from discontinued operations 114,729 32,602 Net income (loss) $50,622 $(189,976) Net income (loss) per common and dilutive share: Loss from continuing operations $(1.68) $(5.94) Income from discontinued operations 3.01 0.87 Net income (loss) $1.33 $(5.07)
|CONTACT:||Barron Beneski Public and Investor Relations of Orbital Sciences|
|Corporation, +1-703-406-5528, or email@example.com.|
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CONTACT: Barron Beneski Public and Investor Relations of Orbital Sciences Corporation, +1-703-406-5528, or firstname.lastname@example.org/