Orbital Sciences Corporation
today announced its first quarter 2001 financial results,
reporting a net loss of $21,567,000 (or $0.57 per share), compared to the
first quarter 2000 net loss of $26,524,000 (or $0.71 per share).
The company
also reported progress in completing its previously announced sales of several
non-core business units, allowing it to substantially reduce debt and improve
liquidity by mid-year.
“While we still have challenges ahead this year, the company began 2001
with significant progress in our plan to restore value for our shareholders,”
said Mr. David W. Thompson, Orbital’s Chairman and Chief Executive Officer.
“During the past several months, we announced plans to sell our MDA and
Magellan subsidiaries, which positions Orbital to greatly improve its balance
sheet and financial flexibility.
We also improved the basic operating
performance of, and capitalized on growth opportunities in, our core space
technology businesses, as evidenced by this quarter’s narrowed loss relative
to the last two quarters, and its continued strong new order flow,” he added.
Orbital reported consolidated revenues from continuing operations of
$174,662,000 in the first quarter of 2001, down 12% from comparable first
quarter 2000 revenues of $198,851,000.
Earnings before interest, taxes,
depreciation and amortization (EBITDA) in this year’s first quarter were
$10,456,000, compared to $16,214,000 in the first quarter of 2000.
Operating
income for the first quarter was $14,000 compared to $5,901,000 in the first
quarter of 2000.
Orbital’s first quarter 2001 net loss was $21,567,000 (or
$0.57 per share), compared to a net loss of $26,524,000 (or $0.71 per share)
for the same period in 2000.
The company’s first quarter financial results
are summarized below:
March 31, March 31, Percent
2001 2000 Change
Consolidated Revenues $174,662,000 $198,851,000 -12%
EBITDA 10,456,000 16,214,000 -35%
Operating Income 14,000 5,901,000 N/A
Net Loss From
Continuing Operations (21,567,000) (22,324,000) +3%
Net Loss (21,567,000) (26,524,000) +19%
Loss Per Share (0.57) (0.71) +19%
Significant financial, new business and operational highlights from the
first quarter were as follows:
Financial Highlights
Revenue
Orbital’s space manufacturing businesses, consisting of launch vehicles,
satellites and related space systems, reported revenues of $174,662,000 in the
first quarter, a 12% decrease as compared to revenues of $198,851,000 for the
same period last year.
A primary factor in the decrease in comparative
revenues was the elimination of the company’s Fairchild Defense unit’s revenue
in the results for the first quarter of 2001, as a result of Orbital’s sale of
this non-core business in late 2000.
Other items, including NASA’s
termination of the X-34 rocketplane contract, as well as the suspension of
revenue recognition under the company’s procurement agreements with ORBCOMM
and ORBIMAGE in mid-2000, also had negative impacts to revenue in the first
quarter.
Operating and Net Income
Orbital’s first quarter 2001 operating income, including results from its
MDA subsidiary, was $14,000 as compared to operating income of $5,901,000 for
the same period last year.
The decrease in comparative operating income is
primarily related to the elimination of profit contributions from Fairchild
Defense and the ORBCOMM procurement contract, together with the effect of
NASA’s cancellation of the X-34 contract.
Orbital reported a first quarter net loss of $21,567,000 (or $0.57 per
share) as compared to a net loss of $26,524,000 (or $0.71 per share) for the
same period last year.
This improvement was largely driven by a reduction in
equity losses associated with our ORBCOMM satellite communications affiliate.
“During the first quarter, we made tangible progress in our plan to
improve the profitability of our satellite design and manufacturing programs
and, more generally, to boost operating efficiencies throughout our core space
technology businesses,” said Mr. Thompson.
“However, we realize that
additional steps are required this year in order to complete the refocusing
process.
Our management team is fully committed to taking all the actions
necessary to achieve and sustain profitability in our core operations and to
rebuild value for our shareholders,” he added.
New Business Highlights
During the first quarter of 2001, Orbital received new firm and option
orders for its space manufacturing businesses worth about $275 million.
As a
result, the company’s firm and total contract backlog for its space technology
systems were about $900 million and $3.99 billion, respectively, at March 31,
2001.
Significant new orders in early 2001 included the following contracts:
* Orbital was selected by PanAmSat Corporation, the world’s largest
private communications satellite operator, to provide up to three
geosynchronous (GEO) communications satellites. This important
contract validates Orbital’s small GEO platform and solidifies the
company’s position as a major supplier in the global commercial
satellite market.* The company was chosen by the Republic of China’s National Space
Program to supply six low Earth orbit (LEO) satellites, based on
Orbital’s popular Microstar(TM) spacecraft platform, to support an
advanced weather monitoring project.* Orbital’s Pegasus launch vehicle was awarded a contract to launch a
U.S. Air Force satellite, while a Pegasus-derivative rocket was
selected for design studies relating to another military application.
Operational Highlights
Orbital reached a major operational milestone in early March 2001 by
conducting its 100th consecutive successful space mission since January 1997
(subsequent successful missions through the end of April increased the
company’s “hitting streak” to 103).
This strong operational record, the best
in the space industry during recent years, was achieved with an average
satellite, rocket and space payload production and delivery rate of two per
month over the last five years.
Major operational highlights for the first quarter were as follows:
* Orbital successfully completed, delivered and launched the first of two
geosynchronous direct-to-home digital broadcasting satellites for BSAT
Corporation of Japan. By the end of April, the satellite had been
fully tested and put into operational service, providing television
programming to over 13 million Japanese households.* The company successfully launched three suborbital rockets for the U.S.
Army, the U.S. Navy and the U.S. Air Force in the first quarter, using
launch sites in Alaska, Hawaii and Wake Island.* Orbital successfully carried out three space robotics operations and a
space sensor deployment on the Space Shuttle and the International
Space Station.
Satellite Services Affiliate Updates
ORBCOMM Satellite Data Communications
A preliminary agreement was reached in April regarding the sale of ORBCOMM
Global’s assets to a newly formed consortium of its international distribution
partners and Orbital.
Upon final approval of the reorganization plan by
ORBCOMM’s creditors, Orbital will issue $6.5 million in stock to the creditors
and will obtain a 40% ownership in the newly formed company.
With a lower
cost structure, more focused marketing approach, and continued excellent
network performance, “New ORBCOMM” will be in a good position to efficiently
serve existing and new customers and proceed toward financial self-
sufficiency.
ORBIMAGE Satellite Imaging
In March, ORBIMAGE defaulted on its interest payment obligations under its
$225 million of senior notes, which are non-recourse to Orbital.
ORBIMAGE is
seeking to restructure its debt and to obtain new capital from existing
shareholders as well as third parties.
Orbital plans to deliver ORBIMAGE’s
first high-resolution satellite, OrbView-4, in June of this year, leading to a
launch currently scheduled for July.
Non-Core Business Unit Sales
In April, Orbital announced an agreement to sell its remaining 52%
interest in the company’s MacDonald, Dettwiler and Associates subsidiary in
Canada.
The company also announced that it is in negotiations to sell its
interest in Magellan Corporation and Navigation Solutions LLC.
When complete,
these transactions are expected to generate approximately $225 million in
total proceeds for the company, which will be used to reduce debt and increase
financial flexibility to support future growth.
“We are on track to complete our planned non-core business unit sales of
MDA and Magellan in the second quarter.
Together with continuing financial
improvements in our core space technology operations, these transactions
represent major progress in completing the financial turnaround that we began
last year,” concluded Mr. Thompson.
Orbital is one of the world’s leading manufacturers of low-cost space
systems, including satellites, launch vehicles, space sensors and satellite
ground systems.
Orbital is also involved with satellite-based networks that
provide data communications, high-resolution imagery and automotive
information services 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, planned transactions 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.
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,
2001 2000
Revenues $ 174,662 $ 198,851
Costs of goods sold 146,504 165,424
Gross Profit 28,158 33,427
Research and development expenses 2,563 4,020
Selling, general and administrative expenses 22,290 20,878
Amortization of goodwill 3,291 2,628
Income from operations 14 5,901
Other income (expense), net 980 1,281
Interest expense, net of capitalized interest (10,237) (4,278)
Equity in earnings (losses) of affiliates (9,945) (23,434)
Minority interests (724) (521)
Loss before provision for income taxes
and discontinued operations (19,912) (21,051)
Provision for income taxes 1,655 1,273
Net loss from continuing operations (21,567) (22,324)
Loss from discontinued operations -- (4,200)
Net loss $ (21,567) $ (26,524)
Net loss per common and dilutive share
Loss from continuing operations $ (0.57) $ (0.60)
Loss from discontinued operations -- (0.11)
Net loss $ (0.57) $ (0.71)
Shares used in computing net loss
per common and dilutive share 37,745,045 37,409,030
<
p>CONTACT:
Media: Barron Beneski, 703-406-5528, or
beneski.barron@orbital.com, or Investors: Timothy Perrott, 703-406-5997, or
perrott.tim@orbital.com, both of Orbital Sciences Corporation.
