UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended to
Commission file number 0-3936
Orbit International Corp.
(Exact name of registrant as specified in its charter)
Delaware ID # 11-1826363
(State or other jurisdiction (I.R.S. Employer Identification
incorporation or organization) Number)
80 Cabot Court, Hauppauge, New York 11788
(Address of principal executive offices (Zip Code)
(516) 435-8300
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 month (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15 (d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
June 30, 1998. 6,230,000
ORBIT INTERNATIONAL CORP.
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to a fair
presentation of the results of operations for the periods being reported.
Additionally, it should be noted that the accompanying condensed
financial statements do not purport to contain complete disclosures in
conformity with generally accepted accounting principles.
The results of operations for the six months ended June 30, 1998 are
not necessarily indicative of the results of operations for the full
fiscal year ending December 31, 1998.
The consolidated balance sheet as of December 31, 1997 was condensed
from the audited consolidated balance sheet appearing in the 1997 annual
report on Form 10-K.
These condensed consolidated statements should be read in
conjunction with the Company's financial statements for the fiscal year
ended December 31, 1997.
Part I - Financial Information
Item - I
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1998 1997
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents............... $ 1,725,000 $ 1,096,000
Investment in marketable securities..... 2,798,000 2,004,000
Accounts receivable (less allowance for
doubtful accounts)..................... 2,459,000 3,045,000
Inventories ............................ 7,175,000 6,319,000
Restricted investments, related to
discontinued operations................ 53,000 451,000
Assets held for sale, net............... 97,000 265,000
Other current assets.................... 334,000 304,000
Deferred tax asset...................... 770,000 -
Total current assets.................. 15,411,000 13,484,000
Property, plant and equipment - at cost
less accumulated depreciation and
amortization........................... 2,309,000 2,342,000
Excess of cost over the fair value of
assets acquired....................... 1,203,000 1,251,000
Investment in marketable securities..... 438,000 470,000
Other assets............................ 444,000 352,000
Deferred tax asset...................... 380,000 -
TOTAL ASSETS............................ $20,185,000 $17,899,000
See accompanying notes.
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
June 30, December 31,
1998 1997
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations.. $ 1,568,000 $1,624,000
Accounts payable.......................... 1,166,000 1,086,000
Accrued expenses.......................... 2,425,000 2,114,000
Customer advances......................... 1,459,000 -
Notes payable............................. 148,000 97,000
Accounts payable, accrued expenses and
reserves for discontinued operations..... 869,000 900,000
Due to factor............................. 32,000 260,000
Total current liabilities............... 7,667,000 6,081,000
Long-term obligations, less current
portion................................... 2,999,000 3,667,000
Accounts payable, accrued expenses and
reserves for discontinued operations,
less current portion...................... 592,000 864,000
Total liabilities....................... 11,258,000 10,612,000
STOCKHOLDERS' EQUITY
Common stock - $.10 par value.............. 912,000 909,000
Additional paid-in capital................. 23,553,000 23,538,000
Accumulated deficit........................ (5,896,000) (7,477,000)
Less treasury stock, at cost............... (9,588,000) (9,588,000)
Less deferred compensation................. (58,000) (97,000)
Less unrealized gain on marketable
securities................................ 4,000 2,000
Total stockholders' equity................ 8,927,000 7,287,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $20,185,000 $17,899,000
See accompanying notes.
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
Net sales........... $ 8,520,000 $ 8,396,000 $ 4,235,000 $ 4,426,000
Cost of sales....... 4,881,000 4,901,000 2,372,000 2,526,000
Gross profit........ 3,639,000 3,495,000 1,863,000 1,900,000
Selling, general and
administrative
expense............ 2,724,000 2,664,000 1,407,000 1,437,000
Class action litigation
settlement......... 500,000 - 500,000 -
Interest expense.... 184,000 77,000 89,000 37,000
Investment and
other(income)...... ( 200,000) ( 140,000) ( 93,000) ( 59,000)
Income (loss) before
income tax benefit. 431,000 894,000 (40,000) 485,000
Income tax benefit.. 1,150,000 - 1,150,000 -
NET INCOME.......... $ 1,581,000 $ 894,000 $1,110,000 $ 485,000
Net income per common
share:
Basic............. $ .26 $ .15 $ .18 $ .08
Diluted........... $ .22 $ .13 $ .16 $ .07
See accompanying notes.
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
June 30,
1998 1997
Cash flows from operating activities:
Net income.................................. $1,581,000 $ 894,000
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization.............. 68,000 68,000
Amortization of goodwill................... 48,000 36,000
Compensatory issuance of stock............. 39,000 38,000
Change in value of marketable trading
securities................................. 2,000 2,000
Deferred tax asset......................... (1,150,000) -
Changes in operating assets and liabilities:
Accounts receivable......................... 586,000 455,000
Inventories................................. (856,000) (566,000)
Other current assets........................ (30,000) 3,000
Accounts payable............................ 80,000 187,000
Accrued expenses............................ 311,000 (547,000)
Customer advances........................... 1,459,000 -
Assets held for sale........................ 168,000 524,000
Accounts payable, accrued expenses and
reserves for discontinued operations....... (303,000) (1,670,000)
Other assets................................ (92,000) (125,000)
Net cash provided by (used in)
operating activities...................... 1,911,000 (701,000)
Cash flows from investing activities:
Acquisitions of fixed assets................ (35,000) (50,000)
Purchase of marketable securities........... (3,013,000) (3,149,000)
Proceeds from sales of marketable securities 2,649,000 4,012,000
Net cash provided by (used in)
investing activities...................... (399,000) 813,000
(continued)
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(continued)
Six Months Ended
June 30,
1998 1997
Cash flows from financing activities:
Due to factor............................... (228,000) (148,000)
Repayments of debt.......................... (752,000) (617,000)
Proceeds of debt............................ 79,000 27,000
Stock option exercises...................... 18,000 ___9,000
Net cash (used in) financing activities...... (883,000) (729,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................. 629,000 (617,000)
Cash and cash equivalents - January 1........ 1,096,000 927,000
CASH AND CASH EQUIVALENTS -June 30........... $1,725,000 $ 310,000
Supplemental disclosures of cash flow
information:
Cash paid for:
Interest.............................. $184,000 $ 328,000
Taxes................................. $ 13,000 $ 26,000
See accompanying notes.
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(NOTE 1) - Income Per Share:
The following table sets forth the computation of basic and
diluted income per common share:
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
Denominator:
Denominator for basic
income per share -
weighted-average common
shares 6,143,000 6,014,000 6,150,000 6,018,000
Effect of dilutive securities:
Employee and directors
stock options 770,000 511,000 735,000 483,000
Warrants 189,000 149,000 185,000 144,000
Unearned stock award 58,000 107,000 56,000 104,000
Denominator for diluted
income per share -
weighted-average common
shares and assumed
conversion 7,160,000 6,781,000 7,126,000 6,749,000
The numerator for basic and diluted income per share for the six
months ended June 30, 1998 and June 30, 1997 is the net income for each
period.
(NOTE 2) - Cost of Sales:
For interim periods, the Company estimates its inventory and
related gross profit.
(NOTE 3) - Inventories:
Inventories are comprised of the following:
June 30, December 31,
1998 1997
Raw materials.............. $ 2,501,000 $ 2,262,000
Work-in-process............ 4,674,000 4,057,000
TOTAL $ 7,175,000 $ 6,319,000
(continued)
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(continued)
(NOTE 4) - Available-For-Sale Securities:
Under the terms of certain credit facilities, the Company's
investment portfolio and certain cash balances must be maintained at a
minimum collateral value. On June 30, 1998, this collateral requirement
amounted to approximately $53,000.
The following is a summary of available-for-sale securities as of:
June 30, 1998
Estimated
Fair
Cost Value
U.S. Treasury bills......................... $ 2,553,000 $ 2,553,000
Corporate debt securities .................. 732,000 736,000
___________ ___________
3,285,000 3,289,000
Restricted value of portfolio
used to collateralize credit facility...... 53,000 53,000
Balance of securities portfolio............. $ 3,232,000 $ 3,236,000
The amortized cost and estimated fair value of debt and marketable
equity securities at June 30, 1998 by contractual maturity, are shown
below. Expected maturities will differ from contractual maturities
because the issuers of the securities may have the right to repay
obligations without prepayment penalties.
June 30, 1998
Estimated
Fair
Cost Value
Due in one year or less.................... $ 2,849,000 $ 2,851,000
Due after one year through three years..... 228,000 229,000
Due after three years...................... 208,000 209,000
3,285,000 3,289,000
Restricted value of portfolio used to
collateralize credit facilities........... 53,000 53,000
$ 3,232,000 $ 3,236,000
(continued)
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(continued)
(NOTE 5) - Business Segments:
The Company operates through two business segments. Its Electronics
Segment, through the Orbit Instrument Division, is engaged in the design,
manufacture and sale of customized electronic components and subsystems.
Its Power Units Segment, through the Behlman Electronics, Inc.
subsidiary, is engaged in the design, manufacture and sale of distortion
free commercial power units, power conversion devices and electronic
devices for measurement and display.
The Company's reportable segments are business units that offer
different products. The reportable segments are each managed separately
because they manufacture and distribute distinct products with different
production processes.
The following is the business segment information for the six and
three month periods ended June 30, 1998 and 1997.
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
Net sales:
Electronics......... $ 5,512,000 $ 4,490,000 $ 2,804,000 $2,376,000
Power Units......... 3,071,000 3,906,000 1,473,000 2,050,000
Total $ 8,583,000 $ 8,396,000 $ 4,277,000 $4,426,000
Income from operations:
Electronics......... $ 1,453,000 $ 913,000 $ 816,000 $ 497,000
Power Units......... (109,000) 258,000 (133,000) 141,000
General corporate
expenses not
allocated (a)........ (929,000) (340,000) (727,000) (175,000)
Interest expense....... (184,000) (77,000) (89,000) (37,000)
Investment and other
income............... 200,000 140,000 93,000 59,000
Income before income
taxes. $ 431,000 $ 894,000 $ (40,000) $ 485,000
(a) Includes $500,000 for the class action securities litigation
settlement for the six and three months ended June 30, 1998,
respectively. (See Note 6).
(NOTE 6) - Settlement of Class Action Securities Litigation:
In July, 1998, the Company reached a settlement with respect to the
USA Classic, Inc. class action securities litigation. Such settlement is
subject to an executed "Stipulation of Settlement" by each of the parties
and approval of such by the court. The Company's portion of the
settlement was $1,000,000, of which $500,000 had been previously accrued.
(continued)
Item - II
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS
Results of Operations
Three month period ended June 30, 1998 v. June 30, 1997
The Company currently operates in two industry segments. Its Orbit
Instrument Division is engaged in the design and manufacture of
electronic components and subsystems (the "Electronics Segment"). Its
Behlman subsidiary is engaged in the design and manufacture of commercial
power units (the "Power Units Segment").
Consolidated net sales for the six month period ended June 30,
1998 increased to $8,520,000 from $8,396,000 for the six month period
ended June 30, 1997 due principally to increased sales from the Company's
Electronic Segment partially offset by decreased sales from the
Company's Power Unit Segment.
Gross profit as a percentage of sales for the six month period
ended June 30, 1998 increased to 42.7% from 41.6% for the six month
period ended June 30, 1997 due principally to a higher gross profit
yielded from the Electronics Segment.
Selling, general and administrative expenses for the six months
ended June 30, 1998 slightly increased to $2,724,000 from $2,664,000 for
the six month period ended June 30, 1997 due principally to higher
selling, general and administrative costs incurred by the Electronics
Segment due to increased selling and marketing efforts. Selling, general
and administrative expenses, as a percentage of sales for the six month
period ended June 30, 1998 slightly increased to 32.0% from 31.7% for the
comparable period in 1997.
In July, 1998, the Company reached a settlement with respect to the
USA Classic class action securities litigation subject to an executed
"Stipulation of Settlement" by each of the parties and approval of such
by the court. The Company's portion of the settlement was $1,000,000 of
which $500,000 had been previously accrued. Accordingly, the Company
recorded an additional charge of $500,000 during the second quarter of
1998.
Interest expense for the six month period ended June 30, 1998
increased to $184,000 from $77,000 for the six month period ended
June 30, 1997 due to interest recorded in the current period by the
Company related to a certain debt obligation of the discontinued apparel
operations.
Investment and other income for the six month period ended
June 30, 1998 increased to $200,000 from $140,000 for the six month
period ended June 30, 1997 due principally to an increase in funds
available for investment during the current period.
In connection with the resolution of the USA Classic class action
securities litigation and its related uncertainties and the consistent
earnings from its continuing operations, pursuant to Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
the Company recorded a deferred tax asset of $1,150,000 during the second
quarter of 1998.
Net income for the six month period ended June 30, 1998 increased to
$1,581,000 from $894,000 for the six month period ended June 30, 1997 due
principally to the recognition of a deferred tax asset recorded during
the second quarter of 1998 partially offset by the additional charge of
$500,000 recorded in connection with the settlement of the class action
securities litigation. Excluding the impact of the income tax benefit
and the settlement of the class action litigation, net income for the six
month period ended June 30, 1998 increased to $931,000 from $894,000 for
the same period last year.
Three Month period ended June 30, 1998 v. June 30, 1997
Consolidated net sales for the three month period ended June 30,
1998 decreased to $4,235,000 from $4,426,000 for the three month period
ended June 30, 1997 due principally to decreased sales from the Company's
Power Units Segment partially offset by increased sales from the
Electronics Segment.
Gross profit, as a percentage of sales, for the three months ended
June 30, 1998 increased to 44.0% from 42.9% for the three month period
ended June 30, 1998 due to a higher gross profit margin yielded from the
Electronics Segment due to increased sales.
Selling, general and administrative expenses for the three month
period ended June 30, 1998 slightly decreased to $1,407,000 from
$1,437,000 due principally to lower selling, general and administrative
costs from the Power Units Segment, lower corporate costs and offset by
higher costs from the Electronics Segment due to increased sales and
marketing efforts. Selling, general and administrative expenses, as a
percentage of sales, for the three months ended June 30, 1998 slightly
increased to 33.2% from 32.5% for the comparable period in 1997 due
principally to increased sales in the prior period.
In July, 1998, the Company reached a settlement with respect to the
USA Classic class action securities litigation subject to an executed
"Stipulation of Settlement" by each of the parties and approval of such
by the court. The Company's portion of the settlement was $1,000,000 of
which $500,000 had been previously accrued. Accordingly, the Company
recorded an additional charge of $500,000 during the three months ended
June 30, 1998.
Interest expense for the three month period ended June 30, 1998
increased to $89,000 from $37,000 for the three month period ended June
30, 1997 due to interest recorded in the current period by the Company
related to a certain debt obligation of the discontinued apparel
operations.
Investment and other income for the three month period ended June
30, 1998 increased to $93,000 from $59,000 for the three month period
ended June 30, 1997 due to an increase in funds available for investment
during the current period.
In connection with the resolution of the USA Classic class action
securities litigation and its related uncertainties and the consistent
earnings from its continuing operations, pursuant to Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
the Company recorded a deferred tax asset of $1,150,000 during the three
months ended June 30, 1998.
Net income for the three month period ended June 30, 1998 increased
to $1,110,000 from $485,000 for the three month period ended June 30,
1997 due principally to the deferred tax asset recorded partially offset
by the additional charge of $500,000 recorded in connection with the
settlement of the class action securities litigation. Excluding the
impact of the income tax benefit and the settlement of the class action
litigation, net income for the three month period ended June 30, 1998
decreased to $460,000 from $485,000 for the same period last year.
Liquidity, Capital Resources and Inflation:
Working capital increased to $7,744,000 at June 30, 1998 compared to
$7,403,000 at December 31, 1997. The ratio of current assets to current
liabilities slightly decreased to 2.0 to 1 at June 30, 1998 from 2.2 to
1 at December 31, 1997.
Net cash flows provided by operations for the six months ended June
30, 1998 was approximately $1,911,000 primarily attributable to the net
income for the period, a decrease in accounts receivable and an increase
in customer advances which was partially offset by the recording of a
deferred tax asset and an increase in inventory. Cash flows used in
investing activities for the six months ended June 30, 1998 totaled
approximately $399,000 primarily attributable to the net purchases of
marketable securities. Cash flows used in financing activities for the
six months ended June 30, 1998 totaled approximately $883,000 primarily
attributable to repayments of long-term debt and a decrease in amounts
due to factor.
All operations of the discontinued apparel companies have been
terminated. All losses and obligations of these apparel operations have
been provided for, and accordingly, the Company does not anticipate using
any significant portion of its resources towards these discontinued
apparel operations.
In August 1998, the Company closed on a new $4,000,000 Mortgage and
Term Loan facility with a new lender secured by real property and other
assets of the Company. The Company used $3,500,000 of the proceeds to
replace its existing asset based lending arrangement and the remaining
$500,000 will be used to partially fund the class action securities
litigation settlement of $1,000,000.
Under the Company's factoring arrangement for its discontinued
Canadian apparel operations, the Company has provided a standby letter of
credit as security for its guaranty under this lending facility,
collaterallized by marketable securities. As of June 30, 1998, the
Company had provided approximately $49,000 in a standby letter of credit
which was reduced to approximately $35,000 in July, 1998 due to the
paydown of amounts owed to the factor.
The Company's existing capital resources, including its bank credit
facilities, and its cash flow from operations are expected to be adequate
to cover the Company's cash requirements for the foreseeable future.
Inflation has not materially impacted the operations of the
Company.
Certain Material Trends
Despite continued profitability in 1997 and through the first two
quarters of 1998, the Company continues to face a difficult business
environment with continuing pressure on the Company's prices for its sole
source sales and a general reduction in the level of funding for the
defense sector. Based on current delivery schedules, however, revenues
for the Company should be sustained at the levels recorded in 1997.
The Company continues to seek new contracts which require incurring
up-front design, engineering, prototype and preproduction costs. While
the Company attempts to negotiate contract awards for reimbursement of
product development, there is no assurance that sufficient monies will be
set aside by its customers, including the
U. S. Government, for such effort. In addition, even if the U. S.
Government agrees to reimburse development costs, there is still a
significant risk of cost overrun which may not be reimbursable.
Furthermore, once the Company has completed the design and preproduction
stage, there is no assurance that funding will be provided for future
production.
The Company is heavily dependent upon military spending as a source
of revenues and income. World events have led the U. S. Government to
reevaluate the level of military spending necessary for national
security. Any significant reductions in the level of military spending
by the U. S. Government could have a negative impact on the Company's
future revenues and earnings. In addition, due to major consolidations
in the defense industry, it has become more difficult to avoid dependence
on certain customers for revenue and income. Behlman's line of
commercial products gives the Company some diversity and the Instrument
Division is beginning to introduce certain of its products into
commercial markets.
In December 1997, the Company retained OEM Capital Corp ("OEM"), an
investment banking firm specializing in the electronics, communications
and computer industries, to assist the Company in identifying viable
acquisition opportunities. Although the Company is committed to
enhancing its sales and profitability through strategic acquisitions as
well as through internal growth, there is no guarantee that OEM will
present acquisition candidates that will ultimately result in a
transaction for the Company.
Year 2000
The Company has developed a plan to modify its information
technology systems to recognize the Year 2000, including the purchase of
a new manufacturing software package, and has begun converting its
critical data processing systems. The Company expects the project to be
completed by the end of 1998 and to cost between approximately $100,000
and $150,000. This estimate includes the price of new software and
internal costs but excludes the costs to upgrade and replace systems in
the normal course of business as well as potential costs for outside
consultants to assist the Company in the implementation of a new software
package. The Company does not expect this project to have a material
effect on its operations in 1998 and did not expend any significant
amount of money on this project for the six months ended June 30, 1998.
The Company has also initiated discussions with its significant
suppliers, large customers and financial institutions to ensure that
these parties have appropriate plans to remediate Year 2000 issues where
their systems interface with Company systems or otherwise impact its
operations. The Company is assessing the extent to which its operations
are vulnerable should these organizations fail to properly remediate
their computer systems.
While the Company intends to use diligent efforts and care to
implement the plan set forth above and to take any other necessary steps
with regard to its information technology systems to prepare for the Year
2000, there is no assurance that such steps will effectively accomplish
such goal. Furthermore, any failure on the part of the Company's primary
suppliers, service providers and customers to adapt their respective
information technology systems to recognize the Year 2000 could adversely
impact the Company.
Forward Looking Statements
Statements in this Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this
document as well as statements made in press releases and oral statements
that may be made by the Company or by officers, directors or employees of
the Company acting on the Company's behalf that are not statements of
historical or current fact constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause the actual results of
the Company to be materially different from the historical results or
from any future results expressed or implied by such forward-looking
statements. In addition to statements which explicitly describe such
risks and uncertainties, readers are urged to consider statements labeled
with the terms "believes", "belief", "expects", "intends", "anticipates" or
"plans" to be uncertain and forward-looking. The forward-looking
statements contained herein are also subject generally to other risks and
uncertainties that are described from time to time in the Company's
reports and registration statements filed with the Securities and
Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has dully caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ORBIT INTERNATIONAL CORP.
Registrant
Dated: August 13, 1998 /s/ Dennis Sunshine
Dennis Sunshine, President, Chief
Executive officer and Director
Dated: August 13, 1998 /s/ Mitchell Binder
Mitchell Binder, Vice President-
Finance, Chief Financial Officer
and Director
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
In re USA Classic Securities Litigation:
In July, 1998, the Company reached a settlement with respect to the USA
Classic, Inc. class action securities litigation. Such settlement is
subject to an executed "Stipulation of Settlement" by each of the parties
and approval of such by the court. The Company's portion of the
settlement was $1,000,000.
Item 4. Submission of matters to a vote of security holders
An Annual Meeting of Stockholders of the Company was held on
June 26, 1998. The holders of 6,222,593 shares of Common Stock of the
Company were entitled to vote at the meeting, the holders of 5,869,883
shares of Common Stock, or approximately 94% of shares entitled to vote
at the meeting, were represented by proxy. The following action took
place:
1. The stockholders voted for the election of each of the
following persons nominated to serve as a director of the Company until
the next annual meeting and until his successor is elected and qualified:
Dennis Sunshine by 5,706,132 votes for and 159,751 against, Bruce
Reissman by 5,716,209 votes for and 159,664 against, Mitchell Binder by
5,706,232 votes for and 159,651 against, John Molloy by 5,706,232 votes
for and 159,651 against, Stanley Morris by 5,706,232 votes for and
159,651 against and Marc Pfefferle by 5,706,232 for and 159,651 against.
2. The stockholders voted 5,837,588 for and 23,884 against the
resolution relating to the notification of Ernst & Young LLP as the
independent auditors and accountants for the Company for the year ended
December 31, 1998 (4,411 votes abstained).
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits. None
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