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Orbit International Corp. reported results for the fourth quarter and the year ended December 31, 2025, showing lower revenue and wider losses compared with the prior year period, alongside a modest increase in backlog.
Mitchell Binder, President and CEO of Orbit International, said 2025 was challenging due to lower anticipated bookings in 2024 and the first half of 2025, which affected delivery schedules across business units. He cited a single supply chain issue that undermined scheduled shipments to an Orbit Power Group (“OPG”) customer during the third and fourth quarters, and delayed approximately $1,400,000 scheduled for delivery in the second half of 2025 until the first quarter of 2026.
Binder said the units were substantially completed in 2025 and the customer paid approximately 89% of the total order purchase price, but Orbit was unable to recognize revenue of approximately $1,400,000. He added that, had the revenue been recognized in 2025, the operating loss for the year would have been reduced by approximately $700,000.
Binder said fourth-quarter operating results were negatively affected by the delayed OPG shipment and lower sales by Simulator Product Solutions LLC (“SPS”). He also cited several one-time charges, including higher-than-expected outside test service costs tied to qualification of newly designed units on three programs.
Binder stated that consolidated net loss for the fourth quarter was approximately $708,000 (loss of $0.21 per share) and EBITDA (as adjusted) was a loss of $465,000 (loss of $0.14 per share). He further said that exclusive of incremental outside test service costs, legal fees related to the termination of the former President of SPS, a settlement payment concerning another SPS matter, and an approximately $109,000 loss of profitability due to the supply chain issue, EBITDA (as adjusted) would have been a loss of approximately $91,000.
Binder said SPS results for the three months and twelve months ended December 31, 2025 were adversely impacted by lower sales, driven by reduced bookings in the second half of 2024 and lower than expected bookings throughout 2025. He noted that prior period revenues in 2024 were positively impacted by higher bookings during the 2023 fiscal year.
He added that 2025 bookings were also affected by opportunities not yet finalized and lost opportunities, including due to lack of funding and customers losing awards to competitors. Binder said bookings for SPS in 2025 slightly improved versus 2024, and proposals for new and follow-on opportunities increased. He also said Orbit incurred significant infrastructure costs in 2023 and 2024 to support SPS’ sales increase after the SPS acquisition in 2022, and that the company has taken precautionary measures to trim certain costs while aligning the organization to support growth.
Binder said full-year sales decreased to $22,450,000 from $29,898,000, attributing the decline primarily to lower sales at both Orbit Electronics Group (“OEG”) and OPG, with the OPG reduction linked to the supply chain issue. He said lower OEG sales were attributable to lower bookings in the second half of 2024 and throughout 2025, driven primarily by contract delays, which he described as an inherent risk in contracting with the U.S. government and its prime contractors.
On margins, Binder said gross margin for the twelve months ended December 31, 2025 decreased to 25.6% from 33.3%. He attributed the decline primarily to significantly lower SPS and OPG gross margins, reflecting reduced sales and a higher percentage of overhead and other fixed costs relative to sales. He also said OPG gross margin decreased due to lower sales from the supply chain issue and a higher percentage of lower-margin commercial sales in the fourth quarter.
For the twelve months ended December 31, 2025, selling, general and administrative expenses were $10,375,000, compared with $10,439,000 in the prior year period, a decrease of $64,000. Binder said the decrease reflected lower expenses at Orbit Instrument, OPG, and lower corporate costs, despite an increase of more than $400,000 in SPS expenses.
He said SPS expenses increased due to more than $360,000 of costs for: an outside engineering firm to modify legacy drawings and bill of material part identification developed prior to the acquisition; legal fees tied to litigation associated with the SPS acquisition and the termination of the former President of SPS; and legal fees related to a settlement payment concerning a matter originating prior to the acquisition in 2022.
Backlog at December 31, 2025 was approximately $12.2 million, compared with approximately $12.0 million at December 31, 2024, an increase of approximately 1.7%. Binder said the increase reflected a general rise in backlog from OPG and SPS, despite decreases at Orbit Instrument and Q-Vio Corp. (“Q-Vio”). He said Orbit Instrument faced delays on follow-on contracts throughout the year and that, absent these delays, the company would have had approximately $1,400,000 in additional bookings in 2025, expected in the first half of 2026.
David Goldman, Chief Financial Officer, said that at December 31, 2025, cash and cash equivalents were approximately $684,000, and borrowings under the company’s $4,000,000 line of credit were $2,475,000. Goldman reported book value per share of $3.83 at December 31, 2025, compared with $4.04 at September 30, 2025 and $5.34 at December 31, 2024. He also said the company had approximately $10.0 million in available federal net operating loss carryforwards and $1.0 million in available New York State net operating loss carryforwards.
Binder said operating results for the year were influenced by weak bookings in the second half of 2024 and throughout 2025, particularly affecting Orbit Instrument, which he described as historically the most profitable business. He said follow-on proposals from Orbit Instrument totaled approximately $4,750,000 waiting to be awarded, with some awards expected in the first half of 2026, though timing remained uncertain.
He added that improved bookings from both OPG and SPS carried into 2026. Since January 1, 2026, Binder said SPS has proposed approximately $5,000,000 in new and follow-on business, not including proposals made prior to year-end that could also result in purchase orders. He also said Q-Vio has quoted new and follow-on opportunities and is working on two new projects that could result in significant awards, which he said would not be expected until sometime during the 2027 calendar year.
Orbit International Corp., through its Electronics Group, develops and manufactures custom electronic device and subsystem solutions for military, industrial and commercial applications, with production facilities in Hauppauge, New York, and Carson, California. The company’s Power Group, also located in Hauppauge, designs and manufactures power products including VPX, COTS (commercial-off-the-shelf) and commercial power supplies.
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