SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended
September 30, 1995
ORBITAL SCIENCES CORPORATION
Commission file number 0-18287
Delaware 06-1209561
(State of Incorporation) (IRS Identification
number)
21700 Atlantic Boulevard
Dulles, Virginia 20166 (703) 406-5000
(Address of principal (Telephone number)
executive offices)
The registrant has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
As of November 9, 1995, 22,693,669 shares of the registrant's
common stock were outstanding.
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except share data)
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A S S E T S
September 30, December 31,
1995 1994
CURRENT ASSETS:
Cash and cash equivalents $11,200 $21,156
Short-term investments, at market 32,697 12,426
Receivables, net 89,710 94,236
Inventories, net 25,980 26,098
Deferred income taxes and other assets 12,218 5,914
Total current assets 171,805 159,830
PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated
depreciation and amortization of $32,932 and $33,432, respectively 95,267 102,061
INVESTMENTS IN AFFILIATES, net 67,045 54,721
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED,
less accumulated amortization of $12,177 and $10,042, respectively 70,517 68,878
DEFERRED INCOME TAXES AND OTHER ASSETS 19,313 17,238
TOTAL ASSETS $423,947 $402,728
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of
long-term obligations $5,924 $28,160
Accounts payable 19,132 14,961
Accrued expenses 26,824 37,439
Payable to subcontractors 2,071 13,695
Deferred revenue 20,730 13,272
Total current liabilities 74,681 107,527
LONG-TERM OBLIGATIONS, net of current portion 93,833 81,163
DEFERRED INCOME TAXES AND OTHER LIABILITIES 16,630 11,992
TOTAL LIABILITIES 185,144 200,682
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01; 10,000,000 shares
authorized, no shares issued or outstanding - -
Common stock, par value $.01; 40,000,000 shares authorized,
22,679,643 and 20,170,196 shares outstanding,
after deducting 15,735 shares held in treasury 227 202
Additional paid-in capital 238,395 201,328
Unrealized gains (losses) on short-term investments (80) (462)
Retained earnings 261 978
Total stockholders' equity 238,803 202,046
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $423,947 $402,728
See accompanying notes to condensed consolidated financial statements.
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ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited; in thousands, except share data)
Three Months Ended
September 30,
1995 1994
<S> <C> <C>
REVENUES $79,172 $58,205
COSTS OF GOODS SOLD 57,851 40,891
GROSS PROFIT 21,321 17,314
RESEARCH AND DEVELOPMENT EXPENSES 3,512 3,159
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 12,356 10,184
AMORTIZATION OF EXCESS OF PURCHASE PRICE OVER
NET ASSETS ACQUIRED 791 567
INCOME FROM OPERATIONS 4,662 3,404
NET INTEREST INCOME (EXPENSE) (920) (238)
EQUITY IN EARNINGS (LOSSES) OF AFFILIATES (596) (995)
INCOME BEFORE PROVISION FOR INCOME TAXES 3,146 2,171
PROVISION FOR INCOME TAXES 944 658
NET INCOME $2,202 $1,513
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $0.10 $0.08
SHARES USED IN COMPUTING NET INCOME
PER COMMON AND COMMON EQUIVALENT SHARE 22,986,160 19,213,903
NET INCOME PER COMMON SHARE, ASSUMING FULL DILUTION $0.10 $0.08
SHARES USED IN COMPUTING NET INCOME
PER COMMON SHARE, ASSUMING FULL DILUTION 26,881,696 23,318,078
See accompanying notes to condensed consolidated financial statements.
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<CAPTION>
ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, in thousands, except share data)
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
REVENUES $212,102 $156,880
COSTS OF GOODS SOLD 155,145 114,514
GROSS PROFIT 56,957 42,366
RESEARCH AND DEVELOPMENT EXPENSES 12,276 9,665
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 35,063 24,656
AMORTIZATION OF EXCESS OF PURCHASE PRICE OVER
NET ASSETS ACQUIRED 2,191 1,375
INCOME FROM OPERATIONS 7,427 6,670
NET INTEREST INCOME (EXPENSE) (2,806) 693
EQUITY IN EARNINGS (LOSSES) OF AFFILIATES (234) (1,539)
INCOME BEFORE PROVISION FOR INCOME TAXES
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 4,387 5,824
PROVISION FOR INCOME TAXES 944 1,575
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 3,443 4,249
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (4,160) --
NET INCOME (LOSS) ($717) $4,249
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE:
Income Before Cumulative Effect of Accounting Change $0.16 $0.23
Cumulative Effect of Accounting Change (0.19) --
($0.03) $0.23
SHARES USED IN COMPUTING NET INCOME (LOSS)
PER COMMON AND COMMON EQUIVALENT SHARE 21,640,635 18,346,929
NET INCOME (LOSS) PER COMMON SHARE, ASSUMING FULL DILUTION
Income Before Cumulative Effect of Accounting Change $0.16 $0.21
Cumulative Effect of Accounting Change (0.19) --
($0.03) $0.21
SHARES USED IN COMPUTING NET INCOME (LOSS)
PER COMMON SHARE, ASSUMING FULL DILUTION 25,536,405 22,452,493
See accompanying notes to condensed consolidated financial statements.
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ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Nine Months Ended
September 30,
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($717) $4,249
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization expense 13,186 8,455
Equity in (earnings) losses of affiliates 234 1,538
Cumulative effect of accounting change 4,160 --
Changes in assets and liabilities:
(Increase) decrease in contract receivables 13,852 7,221
(Increase) decrease in components inventory 118 (970)
(Increase) decrease in other current assets (4,957) (1,381)
(Increase) decrease in deposits and other assets (5,701) 3,621
Increase (decrease) in payables and accrued expenses (21,725) (8,671)
Increase (decrease) in deferred revenue 7,667 (18,777)
Increase (decrease) in deferred income taxes and other 4,638 604
Net cash provided by (used in) operating activities 10,756 (4,111)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (16,620) (18,262)
Proceeds from sales of fixed assets 125 --
Purchase of investment securities (24,199) (8,916)
Sale of investment securities 4,310 14,210
Investments in affiliates (11,853) (10,539)
Payment for business acquisition -- (40,718)
Net cash used in investing activities (48,237) (64,225)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings (22,649) 13,546
Principal payments on long-term obligations (3,917) (896)
Proceeds from issuance of long-term obligations 20,000 24,200
Net proceeds from issuances of common stock 34,092 1,276
Adjustment to recast pooled company's year end -- (1,138)
Net cash provided by (used in) financing activities 27,526 36,988
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (9,956) (31,348)
CASH AND CASH EQUIVALENTS, beginning of period 21,156 49,458
CASH AND CASH EQUIVALENTS, end of period $11,200 $18,110
See accompanying notes to condensed consolidated financial statements.
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ORBITAL SCIENCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(Unaudited)
BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited
interim financial information reflects all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation thereof. Certain information and footnote
disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to instructions, rules and
regulations prescribed by the Securities and Exchange Commission.
Although the Company believes that the disclosures provided are
adequate to make the information presented not misleading, these
unaudited interim condensed consolidated financial statements
should be read in conjunction with the audited consolidated
financial statements and the footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1994. Operating results for the three- and nine-month
periods ended September 30, 1995 and 1994 are not necessarily
indicative of the results expected for the full year.
Orbital Sciences Corporation is hereafter referred to as
"Orbital" or the "Company."
(1) The Financial Accounting Standards Board recently
issued Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of" ("SFAS
121"), which (i) requires that long-lived assets "to be
held and used" be reviewed for impairment whenever
events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable,
(ii) requires that long-lived assets "to be disposed
of" be reported at the lower of carrying amount or fair
value less cost to sell, and (iii) provides guidelines
and procedures for measuring an impairment loss that
are significantly different from existing guidelines
and procedures.
The Company adopted the provisions of SFAS 121 during
the quarter ended June 30, 1995. As a result, as of
January 1, 1995 Orbital recorded a cumulative
adjustment for a change in accounting principle of
approximately $4.2 million related to the impairment in
the carrying amount of certain assets to be disposed of
that supported its orbit transfer vehicle product line.
(2) Inventories
Inventories consist of components inventory, work-in-
process inventory and finished goods inventory and are
generally stated at the lower of cost or net realizable
value on a first-in, first-out or specific
identification basis.
Components inventory consists primarily of components
and raw materials purchased to support future
production efforts. Work-in-process inventory consists
primarily of (i) costs incurred under U.S. Government
fixed-price contracts accounted for using the
percentage of completion method of accounting applied
on a units of delivery basis and (ii) partially
assembled commercial products, and generally includes
direct production costs and certain allocated indirect
costs (including an allocation of general and
administrative costs). Work in process inventory has
been reduced by contractual progress payments received.
Finished goods inventory consists of fully assembled
commercial products awaiting shipment.
(3) Excess of Purchase Price Over Net Assets Acquired
During the quarter ended September 30, 1995, as a
result of obtaining additional information subsequent
to the acquisition of Fairchild Space and Defense
Corporation ("Fairchild") on August 11, 1994, the
Fairchild purchase price was reallocated to reflect a
more accurate valuation of assets and liabilities
acquired. As a result of the reallocation, the value
of net liabilities acquired increased by approximately
$3,800,000 with a resulting increase in the excess of
purchase price over net assets acquired.
(4) Investments in Affiliates
The Company's majority-owned subsidiary, Orbital
Communications Corporation ("OCC"), and Teleglobe
Mobile Partners, an affiliate of Teleglobe Inc., formed
a partnership, ORBCOMM Global, L.P. ("ORBCOMM Global"),
formerly known as ORBCOMM Development Partners, L.P.,
for the two-phased design, development, construction,
integration, test and operation of a low-Earth orbit
satellite communications system (the "ORBCOMM System").
Pursuant to the terms of the amended partnership
agreement, OCC and Teleglobe Mobile Partners are each
50% general partners in ORBCOMM Global. Additionally,
OCC owns 51% and 49%, respectively, in ORBCOMM USA,
L.P. ("ORBCOMM USA") and ORBCOMM International
Partners, L.P. ("ORBCOMM International") (ORBCOMM
Global, ORBCOMM USA and ORBCOMM International are,
collectively, the "ORBCOMM Partnerships"), two
partnerships formed to market the ORBCOMM System.
Teleglobe Mobile Partners owns 49% and 51%,
respectively, in the two marketing partnerships.
During the quarter ended September 30, 1995, Teleglobe
Mobile increased its capital commitments to ORBCOMM
Global to $85 million, of which $30 million has been
contributed to date. OCC also increased its total
capital commitments to $75 million, of which
approximately $59 million has been contributed to date.
Orbital is the primary supplier of the communications
satellites, launch vehicles, and the U.S. ground
tracking systems to ORBCOMM Global, and successfully
launched the first two ORBCOMM System satellites in
April 1995. Several anomalies initially observed on
the spacecraft have been resolved and, in July 1995,
Orbital successfully completed on-orbit functional
testing of the satellites. With the testing complete,
ORBCOMM Global can begin conducting communications
testing with customers in actual operating conditions.
Based on its current assessment of the overall business
prospects of the ORBCOMM Partnerships and the ORBCOMM
System, the Company currently believes its investment
of approximately $67 million in ORBCOMM Global is fully
recoverable. If, in the future, implementation of the
ORBCOMM System is significantly delayed, significantly
restricted or abandoned, the Company may be required to
expense part or all of its investment.
(5) Debt
In June 1995, the Company entered into a $20 million
fixed-rate unsecured debt financing arrangement with a
private insurance company. The debt has a six-year
term and bears interest at 10 1/2% per annum.
In September 1995, Orbital entered into a $7 million
unsecured line of credit with an international bank.
The line is repayable upon demand and bears interest at
LIBOR plus 80 basis points, which was approximately 6%
at September 30, 1995. No amounts were outstanding on
the line at September 30, 1995.
(6) Common Stock and Income Per Share
In June 1995, the Company completed a private placement
of two million shares of its Common Stock, receiving
net proceeds of approximately $32 million. The
Company's shares were placed with various international
institutional investors and the private placement was
exempt from registration pursuant to Regulation S of
the Securities Act of 1933, as amended.
Income per common and common equivalent share is
calculated using the weighted average number of common
and common equivalent shares, to the extent dilutive,
outstanding during the periods. Income per common
share assuming full dilution is calculated using the
weighted average number of common and common equivalent
shares outstanding during the periods plus the effects
of an assumed conversion of the Company's 6 3/4%
convertible subordinated debentures, after giving
effect to all net income adjustments that would result
from the assumed conversion. Any reduction of less
than three percent in the aggregate has not been
considered dilutive in the calculation and presentation
of income per common share assuming full dilution.
(7) Income Taxes
The Company has recorded its interim income tax
provision based on estimates of the Company's effective
tax rate expected to be applicable for the full fiscal
year. Estimated effective rates recorded during
interim periods may be periodically revised, if
necessary, to reflect current estimates.
(8) Hercules Incorporated
In November 1988, Orbital and Hercules Incorporated
("Hercules") entered into an joint venture agreement
relating to the development and production of the
Pegasus space launch vehicle (the "Joint Venture
Agreement"). In 1994, Alliant Techsystems, Inc.
("Alliant") acquired the assets of Hercules Aerospace
Company (a wholly owned subsidiary of Hercules) and, in
connection therewith, assumed the rights and
responsibilities of Hercules with respect to the Joint
Venture Agreement. During the second quarter of 1995,
Orbital and Alliant replaced the Joint Venture
Agreement with a joint teaming agreement to provide for
the continuation of joint performance on the Pegasus
and Taurus space launch vehicle programs (the "Joint
Teaming Agreement"). The Joint Teaming Agreement
provides, among other things, that Orbital will perform
as the system prime contractor for all present and
future Pegasus and Taurus missions and Alliant will
perform as a solid rocket motor and payload fairing
subcontractor to Orbital on the Pegasus program and as
a solid rocket motor subcontractor to Orbital on the
Taurus program. As a subcontractor, Alliant will
receive firm-fixed prices for its subcontracts and will
no longer share in contract profits and losses, but
will share in the costs and benefits associated with
certain defined outstanding issues on current
contracts. The Joint Teaming Agreement will continue
through December 31, 2005, unless terminated earlier by
mutual agreement.
Orbital and Alliant have also agreed to a final
dismissal with prejudice of all present and future
claims and litigation related to the Joint Venture
Agreement, including (i) the January 1994 lawsuit filed
by Hercules against Orbital alleging breaches of
certain representations and warranties by Orbital in
the 1988 stock purchase agreement between Hercules and
Orbital, and (ii) the July 1994 lawsuit filed by
Hercules against Orbital alleging breach of fiduciary
duty and breach of contract in the determination of
Orbital's recoverable costs pursuant to the Joint
Venture Agreement.
(9) Reclassifications
Certain reclassifications have been made to the 1994
condensed consolidated financial statements to conform
to the 1995 condensed consolidated financial statement
presentation. The December 1994 acquisition of
Magellan Corporation was recorded using the pooling of
interests method of accounting for business
combinations and, accordingly, Orbital's 1994
historical financial statements have been restated to
reflect this transaction.
(10) Business Combination
On August 31, 1995, Orbital signed an agreement (the
"Combination Agreement") to acquire MacDonald,
Dettwiler and Associates Ltd. ("MDA"), a leading
supplier of commercial remote sensing ground stations,
headquartered in Vancouver, British Columbia. During
its recently completed fiscal year ended March 31,
1995, MDA reported pre-tax income of approximately
US$5,500,000 on sales of approximately US$80,000,000.
The transaction will be structured as a tax-free merger
and accounted for as a pooling of interests.
Pursuant to the terms of the Combination Agreement, a
newly formed Canadian subsidiary of Orbital will issue
exchangeable preferred shares (the "Exchangeable
Shares") for all of MDA's outstanding common stock
based on an exchange ratio to be determined according
to the average closing price of Orbital's stock in the
month prior to closing. The Exchangeable Shares will
be exchangeable on a one-for-one basis for Orbital
common stock. The transaction is expected to close by
the end of November.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE- AND NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 1995 AND 1994
Revenues. Orbital's revenues for the three-month periods ended
September 30, 1995 and 1994 were $79,172,000 and $58,205,000,
respectively. The Company's revenues for the nine-month periods
ended September 30, 1995 and 1994 were $212,102,000 and
$156,880,000, respectively.
Revenues from the Company's space launch vehicle products
decreased to $7,521,000 during the 1995 three-month period from
$17,838,000 during the comparable 1994 period. Space launch
vehicle revenues were $19,486,000 and $47,599,000 for the nine-
month periods ended September 30, 1995 and 1994, respectively.
The significant decrease in revenues during the periods is
attributable primarily to the continuing effects of production
delays caused by the Company's two failed launches of its new
Pegasus XL launch vehicle in June 1994 and in June 1995. Orbital
expects total 1995 space launch vehicle revenues to be less than
1994 as a result of the ongoing failure review and return to
flight process, although fourth quarter sales are expected to be
higher than third quarter sales due to work performed on newly
awarded contracts and option exercises for Taurus launches.
Sales of space launch vehicles to ORBCOMM Global were $4,463,000
and $3,629,000 for the three-month periods ended September 30,
1995 and 1994, respectively.
Revenues from suborbital launch vehicle products increased to
$5,400,000 in the 1995 three-month period as compared to
$4,699,000 in the 1994 period. Suborbital revenues were
$16,891,000 and $16,325,000 for the nine-month periods ended
September 30, 1995 and 1994, respectively. While suborbital
revenues have decreased significantly during the past few years
as U.S. Government defense spending has been reduced, the Company
expects 1995 revenues to remain approximately consistent with, or
to slightly increase from, revenue levels achieved in 1994. The
increase in 1995 third quarter sales as compared to 1994's third
quarter sales was the first such increase since 1992.
For the three months ended September 30, 1995, spacecraft systems
revenues increased to $32,337,000 from $11,043,000 in the 1994
period, and revenues for the nine-month period ended September
30, 1995 were $61,238,000 as compared to $26,775,000 in the same
period in 1994. The increase in spacecraft system sales is
primarily due to additional revenues generated from the Company's
Germantown operations, acquired in August 1994 (the "Germantown
Acquisition") and to sales to ORBCOMM Global. The 1995 and 1994
three-month periods included $19,198,000 and $3,685,000,
respectively, in sales of MicroStar spacecraft to ORBCOMM Global.
Revenues generated from sales of space sensors and instruments of
$2,028,000 during the 1995 quarter decreased from the comparable
1994 quarter sales of $4,591,000. Space sensors and instruments
sales were $8,575,000 and $13,363,000 for the 1995 and 1994 nine-
month periods, respectively, and are expected to remain lower
than 1994 levels throughout 1995.
Revenues from defense electronics and avionics products were
approximately $12,676,000 for the three-month period ended
September 30, 1995 as compared to $2,651,000 in the 1994 period.
Defense electronics and avionics products sales were $42,466,000
and $8,511,000 in the 1995 and 1994 nine-month periods,
respectively. These products were acquired as part of the
Germantown Acquisition and the September 1993 acquisition of the
Applied Science Operation of The Perkin-Elmer Corporation.
Revenues from sales of navigation and positioning products
increased to $14,564,000 for the three months ended September 30,
1995 as compared to $8,185,000 for the 1994 period, and to
$41,023,000 for the nine months ended September 30, 1995 as
compared to $26,738,000 for the 1994 period, primarily due to a
substantial increase in unit sales offset, in part, by lower unit
prices for GPS navigators. The Company expects navigation and
positioning products sales to continue to increase in the fourth
quarter of 1995.
Revenues from the Company's newly established Advanced Projects
Group were $2,261,000 during the third quarter of 1995 and
$11,665,000 for the first nine months of 1995 as a result of work
performed under a cooperative agreement with NASA awarded earlier
in 1995 for the development of a new small reusable launch
vehicle and under contract to the U.S. Government's Advanced
Research Projects Agency for the preliminary design of a new
advanced unmanned, long-duration, high-flying aircraft.
Gross Profit. Gross profit depends on a number of factors,
including the Company's mix of contract types and costs incurred
thereon in relation to estimated costs. The Company's gross
profit for the three-month periods ended September 30, 1995 and
1994 was $21,321,000 and $17,314,000, respectively. Gross margin
for the nine-month periods ended September 30, 1995 and 1994 was
$56,957,000 and $42,366,000, respectively. Gross profit margin
as a percentage of sales for those periods was approximately
26.9% and 29.7%, respectively, and 26.9% and 27.0%, respectively.
The decreasing gross profit margin as a percentage of sales
during 1995 is primarily attributable to cost increases on the
Pegasus program as a result of the Pegasus XL failures in June of
1994 and 1995. The Company believes that its gross profit margin
for the remainder of 1995 will increase slightly as compared to
1994 and the first nine months of 1995.
Research and Development Expenses. Research and development
expenses represent Orbital's self-funded product development
activities, and exclude direct customer-funded development.
Research and development expenses during the three-month periods
ended September 30, 1995 and 1994 were $3,512,000 and $3,159,000,
respectively. Research and development expenses for the 1995 and
1994 nine-month periods were $12,276,000 and $9,665,000,
respectively. Research and development expenses in 1995 relate
primarily to the development of new or improved navigation
products and development efforts on the Company's Pegasus
program, and include estimated expenses related to the 1995
Pegasus XL failure. The Company expects its research and
development expenditures for the rest of 1995 to be consistent
with 1994 expenditures.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses include the costs of marketing,
advertising, promotional and other selling expenses as well as
the costs of the finance, administrative and general management
functions of the Company. Selling, general and administrative
expenses for the three months ended September 30, 1995 and 1994
were $12,356,000 (or 15.6% of revenues) and $10,184,000 (or 17.5%
of revenues), respectively. Selling, general and administrative
expenses for the nine months ended September 30, 1995 and 1994
were $35,063,000 (or 16.5% of revenues) and $24,656,000 (or 15.7%
of revenues), respectively. The increase in selling, general and
administrative expenses during 1995 as compared to 1994 was
primarily attributable to substantially expanded marketing
efforts related to the Company's ORBCOMM project, various remote
sensing systems, and to the Germantown Acquisition. The Company
expects selling, general and administrative expenses as a
percentage of revenues during the remainder of 1995 to be in line
with the percentage attained during third quarter of 1995.
Interest Income and Interest Expense. Net interest expense was
$920,000 for the three months ended September 30, 1995 as
compared to net interest expense of $238,000 during the 1994
quarter. Net interest expense for the 1995 nine-month period was
$2,806,000 as compared to $693,000 of net interest income for the
1994 nine-month period. Interest income for the periods reflects
interest earnings on short-term investments. Interest expense is
primarily for outstanding amounts on Orbital's revolving credit
facility, on the Company's public debentures, on acquisition debt
incurred for the Germantown Acquisition and, in 1995, on private
debt issued in June 1995. Interest expense has been reduced by
capitalized interest of $3,769,000 and $3,900,000 for the 1995
and 1994 nine-month periods, respectively.
Equity in Earnings (Losses) of Affiliates. Equity in earnings
(losses) of affiliates for the three-month periods ended
September 30, 1995 and 1994 of ($596,000) and ($995,000),
respectively, and for the nine-month periods ended September 30,
1995 of ($234,000) and ($1,539,000), respectively, represents
elimination of 50% of the profits on sales to ORBCOMM Global, as
well as the Company's pro rata share of ORBCOMM Global's current
period earnings and losses. During the construction phase of the
ORBCOMM project and prior to the commencement of planned
operations, ORBCOMM Global is capitalizing substantially all
construction-related costs and is expensing as incurred all
selling, general and administrative costs as period costs.
Provision for Income Taxes. The Company recorded an income tax
provision of $944,000 and $658,000 for the three-month periods
ended September 30, 1995 and 1994, respectively, and provisions
of $944,000 and $1,575,000, respectively, for the nine-month
periods then ended. The Company records its interim income tax
provisions based on estimates of the Company's effective tax rate
expected to be applicable for the full fiscal year. Estimated
effective rates recorded during interim periods may be
periodically revised, if necessary, to reflect current estimates.
At December 31, 1994, Orbital had approximately $50,000,000 and
$900,000 of net operating loss and tax credit carryforwards,
respectively, which are available to reduce future income tax
obligations, subject to certain annual limitations and other
restrictions.
LIQUIDITY AND CAPITAL RESOURCES
The Company's growth has required substantial capital to fund
both an expanding business base and significant research and
development and capital investment expenditures. Additionally,
the Company has historically made strategic acquisitions of
businesses and routinely evaluates potential acquisition
candidates. The Company expects to continue to pursue potential
acquisitions that it believes would augment its marketing,
technical, manufacturing or financial capabilities. The Company
has funded these requirements to date, and expects to fund its
requirements in the future, through cash generated by operations,
working capital loan facilities, asset-based financings, joint
venture arrangements, and private and public equity and debt
offerings.
During the quarter ended June 30, 1995, Orbital entered into a
$20 million fixed-rate unsecured debt financing arrangement with
a private insurance company. The debt has a six-year term and
bears interest at 10 1/2% per annum. The debt arrangement
restricts the payment of dividends and contains certain covenants
with respect to the Company's working capital, fixed charge
ratio, leverage ratio and tangible net worth. Additionally, in
June 1995, the Company completed a private placement of two
million shares of its Common Stock, receiving net proceeds of
approximately $32 million. The Company's shares were placed with
various offshore institutional investors and the private
placement was exempt from registration pursuant to Regulation S
of the Securities Act of 1933, as amended. In August 1994,
Orbital issued secured notes totaling approximately $24,200,000
to eight financial institutions, to support the Germantown
Acquisition. The notes have an average interest rate of
approximately 8 3/4% and generally mature on a monthly basis over
a three- to five-year period.
Cash, cash equivalents and short-term investments were
$43,117,000 at September 30, 1995, and the Company had short-term
and long-term debt obligations outstanding of approximately
$99,757,000. The outstanding debt relates primarily to secured
notes issued in connection with the Germantown Acquisition,
unsecured notes issued in 1995, fixed asset financings and the
Company's public debentures. During the quarter ended June 30,
1995, Orbital converted approximately $3,000,000 of its
convertible debentures at the request of certain debenture
holders, issuing approximately 209,000 shares of Common Stock.
The Company's primary revolving credit facility provides for
total borrowings from an international syndicate of six banks of
up to $65,000,000, subject to a defined borrowing base comprised
of certain contract receivables. No borrowings were outstanding
under the facility at September 30, 1995, and the available
facility limit was approximately $25,000,000. At September 30,
1995, the average interest rate on outstanding borrowings under
this facility was approximately 8%. Borrowings are secured by
contract receivables and certain other assets. The facility
restricts the payment of dividends and contains certain covenants
with respect to the Company's working capital, fixed charge
ratio, leverage ratio and tangible net worth, and expires in
September 1997. The Company (or its subsidiaries) also maintains
two additional, smaller revolving credit facilities, under which
no amounts were outstanding at September 30, 1995.
The Company's operations provided net cash of approximately
$10,756,000 in the nine months ended September 30, 1995. The
Company also invested approximately $11,853,000 in its ORBCOMM
project and $16,620,000 in capital expenditures related primarily
to spacecraft production and test equipment and various remote
sensing and Earth observation satellite systems.
Orbital's capital expenditures for 1995 are expected to
approximate 1994 and 1993 levels, including continued investments
in space launch vehicle and spacecraft production, test, and
airborne and ground support equipment.
Orbital expects to invest up to $15,000,000 in various ORBIMAGE
remote sensing projects. Orbital also intends to invest an
additional $5,000,000 in the ORBCOMM System. Orbital expects
that its 1995 capital needs for its existing operations,
including its planned $5,000,000 additional investment in the
ORBCOMM project, will in part be provided by working capital,
cash flows from operations, credit facilities, asset-based
financings, customer financings and operating lease arrangements.
Additionally, as part of a joint venture to be partially funded
by NASA and Rockwell International Corporation, Orbital intends
to invest at least $73,000,000 in the development of a new small
reusable launch vehicle, which investment will be required over
the next four years, including approximately $5,000,000 in 1995.
Orbital believes that it may require additional equity and/or
debt financing to fully fund its currently planned operations and
capital requirements, to meet its potential increased investment
in the ORBCOMM System and to meet its investment requirements for
the new launch vehicle and other potential projects.
On August 31, 1995, Orbital signed an agreement (the "Combination
Agreement") to acquire MacDonald, Dettwiler and Associates Ltd.
("MDA"), a leading supplier of commercial remote sensing ground
stations, headquartered in Vancouver, British Columbia. During
its recently completed fiscal year ended March 31, 1995, MDA
reported pre-tax income of approximately US$5,500,000 on sales of
approximately US$80,000,000. Pursuant to the terms of the
Combination Agreement, a newly formed Canadian subsidiary of
Orbital will issue exchangeable preferred shares (the
"Exchangeable Shares") for all of MDA's outstanding common stock
based on an exchange ratio to be determined according to the
average closing price of Orbital's stock in the month prior to
closing. The Exchangeable Shares will be exchangeable on a one-
for-one basis for Orbital common stock. The transaction is
expected to close by the end of November.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - A complete listing of exhibits required
is given in the Exhibit Index that precedes the
exhibits filed with this report.
(b) On November 2, 1995, the Company filed a
report on Form 8-K reporting the proposed
acquisition of MacDonald, Dettwiler and Associates
Ltd. On November 6, 1995 the Company filed
Amendment No. 1 on Form 8-K/A.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
ORBITAL SCIENCES CORPORATION
DATED: November 14, 1995 By: /s/ David W. Thompson
David W. Thompson, President
and Chief Executive Officer
DATED: November 14, 1995 By: /s/ Carlton B. Crenshaw
Carlton B. Crenshaw, Senior
Vice President and Principal
Financial Officer
EXHIBIT INDEX
The following exhibits are filed as part of this report.
Exhibit Description
No.
2 Combination Agreement dated as of August 31, 1995 among
Orbital Sciences Corporation, 3173623 Canada Inc. and
MacDonald, Dettwiler and Associates Ltd. (Incorporated
by reference to Exhibit 2 filed with the Company's
Report on Form 8-K filed with the Commission on November
2, 1995).
3 By-laws of Orbital Sciences Corporation, as amended on
July 27, 1995 (transmitted herewith).
10.1 First Amendment, dated as of June 30, 1995, to Note
Agreement between the Company and The Northwestern
Mutual Life Insurance Company dated as of June 1, 1995
(transmitted herewith).
10.2 Amendment No. 2 to the Credit Agreement dated as of July
5, 1995 among the Company, Orbital Imaging Corporation
and Fairchild Space and Defense Corporation, the Banks
listed therein, Morgan Guaranty Trust Company of New
York, as Administrative Agent, and J.P. Morgan Delaware,
as Collateral Agent (transmitted herewith).
10.3 Amendment No. 3 to the Credit Agreement dated as of
August 23, 1995 among the Company, Orbital Imaging
Corporation and Fairchild Space and Defense Corporation,
the Banks listed therein, Morgan Guaranty Trust Company
of New York, as Administrative Agent, and J.P. Morgan
Delaware, as Collateral Agent (transmitted herewith).
11 Statement re: Computation of Earnings Per Share
(transmitted herewith).
27 Financial Data Schedule (such schedule is furnished for
the information of the Securities and Exchange
Commission and is not to be deemed "filed" as part of
the Form 10-Q, or otherwise subject to the liabilities
of Section 18 of the Securities Exchange Act of 1934)
(transmitted herewith).
BY-LAWS
OF
ORBITAL SCIENCES CORPORATION
ARTICLE I
LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS
Section 1.1 These by-laws are subject to the certificate
of incorporation of the corporation. In these by-laws,
references to law, the certificate of incorporation and by-laws
mean the law, the provisions of the certificate of incorporation
and the by-laws as from time to time are in effect.
ARTICLE II
STOCKHOLDERS
Section 2.1 Annual Meeting. The annual meeting of
stockholders shall be held on such date and time as shall be
designated from time to time by the board of directors and stated
in the notice of the meeting, at which meeting the stockholders
shall elect a board of directors and transact such other business
as may be required by law or these by-laws or as may properly
come before the meeting.
Section 2.2 Special Meeting. A special meeting of the
stockholders may be called at any time by the chairman, if any,
or the president. A special meeting of the stockholders shall be
called by the secretary, or in the case of the death, absence,
incapacity or refusal of the secretary, by an assistant secretary
or some other officer, upon application of a majority of the
directors, which application shall state the purpose or purposes
of the meeting. Any call for a meeting shall state the place,
date, hour, and purposes of the meeting.
Section 2.3 Place of Meeting. A meeting of the stock
holders for the election of directors or for any other purpose
shall be held at such place within or without the State of
Delaware as may be determined from time to time by the chairman,
if any, the president or the board of directors. Any adjourned
session of any meeting of the stockholders shall be held at the
place of the adjourned session or at such other place as may be
designated in the vote of adjournment.
Section 2.4 Notice of Meetings. Except as otherwise
provided by law, a written notice of each meeting of stockholders
stating the place, day and hour thereof and, in the case of a
special meeting, the purposes for which the meeting is called,
shall be given not less than ten nor more than sixty days before
the meeting, to each stockholder entitled to vote thereat, by
leaving such notice with him or at his residence or usual place
of business, or by depositing it in the United States mail,
postage prepaid, and addressed to such stockholder at his address
as it appears in the records of the corporation. Such notice
shall be given by the secretary or by a person designated by the
board of directors, or in the case of a special meeting by the
officer calling the meeting. Notice of an adjourned meeting of
stockholders need not be given if the time and place thereof are
announced at the meeting at which the adjournment was taken,
except that if the adjournment is for more than thirty days or if
after the adjournment a new record date is set for the adjourned
meeting, notice of any such adjourned meeting shall be given in
the manner heretofore described. No notice of any meeting of
stockholders or any adjourned session thereof need be given to a
stockholder if a written waiver of notice, executed before or
after the meeting or such adjourned session by such stockholder,
is filed with the records of the meeting or if the stockholder
attends such meeting without objecting at the beginning of the
meeting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the stock
holders or any adjourned session thereof need be specified in any
written waiver of notice.
Section 2.5 Quorum of Stockholders. At any meeting of
the stockholders a quorum as to any matter shall consist of a
majority of the votes entitled to be cast on the matter, except
where a larger quorum is required by law, by the certificate of
incorporation or by these by-laws. Any meeting may be adjourned
from time to time by a majority of the votes properly cast upon
the question whether or not a quorum is present. If a quorum is
present at an original meeting, a quorum need not be present at
an adjourned session of that meeting. Shares of its own stock
belonging to the corporation or to another corporation, if a
majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or
indirectly, by the corporation, shall neither be entitled to vote
nor be counted for quorum purposes; provided, however, that the
foregoing shall not limit the right of any corporation to vote
stock, including but not limited to its own stock, held by it in
a fiduciary capacity.
Section 2.6 Action by Vote. When a quorum is present at
any meeting, a plurality of the votes properly cast for election
to any office shall elect to such office and a majority of the
votes properly cast upon any question other than an election to
an office shall decide the question, except when a larger vote is
required by law, by the certificate of incorporation or by these
by-laws. No ballot shall be required for any election unless
requested by a stockholder present or represented at the meeting
and entitled to vote in the election.
Section 2.7 Pre-Meeting Notification. A stockholder may
propose to discuss business, or to introduce a resolution for
vote, at a meeting of stockholders, provided that the nature of
any such business, and the wording of any such resolution, is
delivered in writing to the secretary at least thirty days prior
to the date of such meeting. In the event such business or
resolution concerns the nomination for election as a director of
a person not nominated by the corporation, the information so
delivered to the secretary shall include the name, age, address,
employment history for the past ten years, and stock ownership in
the corporation of such person, together with any other
information that may be required by law.
Section 2.8 Proxy Representation. Every stockholder may
authorize another person or persons to act for him by proxy in
all matters in which a stockholder is entitled to participate,
whether by waiving notice of any meeting of the stockholders,
objecting to or voting or participating at a meeting, or
expressing consent or dissent without a meeting. Every proxy
must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its
date unless such proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A
proxy may be made irrevocable regardless of whether the interest
with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. The authorization of a
proxy may but need not be limited to specified action; provided,
however, that if a proxy limits its authorization to a meeting or
meetings of stockholders, unless otherwise specifically provided
such proxy shall entitle the holder thereof to vote at any
adjourned session but shall not be valid after the final
adjournment thereof.
Section 2.9 Inspectors. The board of directors or the
person presiding at a meeting of the stockholders may, but need
not, appoint one or more inspectors of election and any
substitute inspectors to act at the meeting or any adjourned
session thereof. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully
to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate
all votes, ballots or consents, determine the result, and do such
acts as are proper to conduct the election or vote with fairness
to all stockholders. At the request of the person presiding at
the meeting, the inspectors shall make a report in writing on any
challenge, question or matter determined by them and execute a
certificate of any fact found by them.
Section 2.10 List of Stockholders. The secretary shall
prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order and showing
the address of each stockholder and the number of shares
registered in his name. The stock ledger shall be the only
evidence as to who are stockholders entitled to examine such list
or to vote in person or by proxy at such meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1 Number. The number of directors constituting
the whole board shall not be less than one nor more than fifteen.
Within the foregoing limits, the stockholders at the annual
meeting shall determine the number of directors and shall elect
the number of directors as determined. Within the foregoing
limits, the number of directors may be increased or decreased at
any time or from time to time by the stockholders or by the
directors by vote of a majority of the directors then in office,
provided that the number may be so decreased only to eliminate
vacancies existing by reason of the death, resignation or removal
of one or more directors.
Section 3.2 Tenure. Except as otherwise provided by law,
the certificate of incorporation or these by-laws, each director
shall hold office until the next annual meeting and until his
successor is elected and qualified, or until he earlier dies,
resigns, is removed or becomes disqualified.
Section 3.3 Powers. The business and affairs of the
corporation shall be managed by or under the direction of the
board of directors which shall have and may exercise all the
powers of the corporation and do all such lawful acts and things
as are not by law, the certificate of incorporation or these
by-laws directed or required to be exercised or done by the
stockholders.
Section 3.4 Vacancies. Vacancies and any newly created
directorships resulting from any increase in the number of
directors may be filled by vote of the stockholders at a meeting
called for that purpose, or by a majority of the directors then
in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the
board, effective at a future date, a majority of the directors
then in office, including those who have so tendered their
resignations, shall have power to fill such vacancy or vacancies,
the vote or action thereon to take effect when such resignation
or resignations shall become effective. The directors shall have
and may exercise all their powers notwithstanding the existence
of one or more vacancies, subject to any requirements of law, the
certificate of incorporation or these by-laws as to the number of
directors required for a quorum or for any vote or other action.
Section 3.5 Committees. The board of directors may, by
vote of a majority of the whole board, (a) designate, change the
membership of or terminate the existence of any committee or
committees, each committee to consist of one or more of the
directors; (b) designate one or more directors as alternate
members of any such committee who may replace any absent or
disqualified member at any meeting of the committee; and (c)
determine the extent to which each such committee shall have and
may exercise the powers of the board of directors in the
management of the business and affairs of the corporation,
including the power to authorize the seal of the corporation to
be affixed to all papers which require it and the power and
authority to declare dividends or to authorize the issuance of
stock; excepting, however, such powers which by law, the
certificate of incorporation or these by-laws it is prohibited
from so delegating. In the absence or disqualification of any
member of such committee and his alternate, if any, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously
appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.
Except as the board of directors may otherwise determine, any
committee may make rules for the conduct of its business, but
unless otherwise provided by the board or such rules, its
business shall be conducted as nearly as may be in the same
manner as is provided by these by-laws for the conduct of
business by the board of directors. Each committee shall keep
regular minutes of its meetings and report the same to the board
of directors upon request.
Section 3.6 Regular Meetings. Regular meetings of the
board of directors may be held without call or notice at such
places within or without the State of Delaware and at such times
as the board may from time to time determine, provided that
notice of the first regular meeting following any such
determination shall be given to absent directors. A regular
meeting of the directors may be held without call or notice
immediately after and at the same place as the annual meeting of
stockholders.
Section 3.7 Special Meetings. Special meetings of the
board of directors may be held at any time and at any place
within or without the State of Delaware designated in the notice
of the meeting, when called by the chairman of the board, if any,
the president, or by one-third or more in number of the
directors, reasonable notice thereof being given to each director
by the secretary or by the chairman of the board, if any, the
president or any one of the directors calling the meeting.
Section 3.8 Notice. It shall be reasonable and
sufficient notice to a director to send notice by mail at least
forty-eight hours or by telegram at least twenty-four hours
before the meeting addressed to him at his usual or last known
business or residence address or to give notice to him in person
or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any director if a
written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any
director who attends the meeting without protesting prior thereto
or at its commencement the lack of notice to him. Neither notice
of a meeting nor a waiver of a notice need specify the purposes
of the meeting.
Section 3.9 Quorum. Except as may be otherwise provided
by law, the certificate of incorporation or these by-laws, at any
meeting of the directors a majority of the directors then in
office shall constitute a quorum; a quorum shall not in any case
be less than one-third of the total number of directors
constituting the whole board. Any meeting may be adjourned from
time to time by a majority of the votes cast upon the question,
whether or not a quorum is present, and the meeting may be held
as adjourned without further notice.
Section 3.10 Action by Vote. Except as may be otherwise
provided by law, the certificate of incorporation or these by
laws, when a quorum is present at any meeting the vote of a
majority of the directors present shall be the act of the board
of directors.
Section 3.11 Action Without a Meeting. Any action
required or permitted to be taken at any meeting of the board of
directors or a committee thereof may be taken without a meeting
if all the members of the board or of such committee consent
thereto in writing, and such writing or writings are filed with
the records of the meetings of the board or of such committee.
Such consent shall be treated for all purposes as the act of the
board or of such committee.
Section 3.12 Participation in Meetings by Conference
Telephone. Members of the board of directors, or any committee
designated by the board, may participate in a meeting of the
board or such committee by means of conference telephone or
similar communications equipment whereby all persons partici
pating in the meeting can hear each other, or by any other means
permitted by law. Such participation shall constitute presence
in person at such meeting.
Section 3.13 Compensation. In the discretion of the board
of directors, each director may be paid such fees for his
services as director and be reimbursed for his reasonable
expenses incurred in the performance of his duties as director as
the board of directors from time to time may determine. Nothing
contained in this section shall be construed to preclude any
director from serving the corporation in any other capacity and
receiving reasonable compensation therefor.
Section 3.14 Interested Directors and Officers.
(a) No contract or transaction between the corporation and
one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association,
or other organization in which one or more of the corporation's
directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely of this
reason, or solely because the director or officer is present at
or participates in the meeting of the board or committee thereof
which authorizes the contract or transaction, or solely because
his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or
are known to the board of directors or the committee, and the
board or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors
be less than a quorum; or
(2) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by
vote of the stockholders; or
(3) The contract or transaction is fair as to the
corporation as of the time it is authorized, approved or
ratified, by the board of directors, a committee thereof, or the
stockholders.
(b) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes such a contract or
transaction.
ARTICLE IV
OFFICERS AND AGENTS
Section 4.1 Enumeration; Qualification. The officers of
the corporation shall be a president, a treasurer, a secretary
and such other officers, if any, as the board of directors from
time to time may in its discretion elect or appoint, including
without limitation a chairman of the board, one or more vice
presidents and a controller. The corporation may also have such
agents, if any, as the board of directors from time to time may
in its discretion choose. Any officer may be but none need be a
director or stockholder. Any two or more offices may be held by
the same person. Any officer may be required by the board of
directors to secure the faithful performance of his duties to the
corporation by giving bond in such amount and with sureties or
otherwise as the board of directors may determine.
Section 4.2 Powers. Subject to law, the certificate of
incorporation and the other provisions of these by-laws, each
officer shall have, in addition to the duties and powers herein
set forth, such duties and powers as are commonly incident to his
office and such additional duties and powers as the board of
directors may from time to time designate.
Section 4.3 Election. The officers may be elected by the
board of directors at their first meeting following the annual
meeting of the stockholders or at any other time. At any time or
from time to time the directors may delegate to any officer their
power to elect or appoint any other officer or any agents.
Section 4.4 Tenure. Each officer shall hold office until
the first meeting of the board of directors following the next
annual meeting of the stockholders and until his respective
successor is chosen and qualified unless a shorter period shall
have been specified by the terms of his election or appointment,
or in each case until he earlier dies, resigns, is removed or
becomes disqualified. Each agent shall retain his authority at
the pleasure of the directors, or the officer by whom he was
appointed or by the officer who then holds agent appointive
power.
Section 4.5 Chairman of the Board of Directors, President
and Vice Presidents. The chairman of the board, if any, shall
have such duties and powers as shall be designated from time to
time by the board of directors. Unless the board of directors
otherwise specifies, the chairman of the board, or if there is
none the chief executive officer, shall preside, or designate the
person who shall preside, at all meetings of the stockholders and
of the board of directors.
Unless the board of directors otherwise specifies, the
president shall be the chief executive officer and shall have
direct charge of all business operations of the corporation and,
subject to the control of the directors, shall have general
charge and supervision of the business of the corporation.
Any vice presidents shall have such duties and powers as
shall be set forth in these by-laws or as shall be designated
from time to time by the board of directors or by the president.
Section 4.6 Treasurer and Assistant Treasurers. The
treasurer shall be in charge of the corporation's funds and
valuable papers, and shall have such other duties and powers as
may be designated from time to time by the board of directors or
by the president. If no controller is elected, the treasurer
shall also have the duties and powers of the controller.
[Amended July 27, 1995.]
Any assistant treasurer shall have such duties and
powers as shall be designated from time to time by the board of
directors, the president or the treasurer.
Section 4.7 Controller and Assistant Controllers. If a
controller is elected, the controller shall be the chief
accounting officer of the corporation and shall be in charge of
its books of account and accounting records, and of its
accounting procedures. The controller shall have such other
duties and powers as may be designated from time to time by the
board of directors, the president or the treasurer.
Any assistant controllers shall have such duties and powers
as shall be designated from time to time by the board of
directors, the president, the treasurer or the controller.
Section 4.8 Secretary and Assistant Secretaries. The
secretary shall record all proceedings of the stockholders, of
the board of directors and of committees of the board of
directors in a book or series of books to be kept therefor and
shall file therein all actions by written consent of stockholders
or directors. In the absence of the secretary from any meeting,
an assistant secretary, or if there be none or he is absent, a
temporary secretary chosen at the meeting, shall record the
proceedings thereof. Unless a transfer agent has been appointed
the secretary shall keep or cause to be kept the stock and
transfer records of the corporation, which shall contain the
names and record addresses of all stockholders and the number of
shares registered in the name of each stockholder. The secretary
shall have such other duties and powers as may from time to time
be designated by the board of directors or the president.
Any assistant secretaries shall have such duties and powers
as shall be designated from time to time by the board of
directors, the president or the secretary.
ARTICLE V
RESIGNATIONS AND REMOVALS
Section 5.1 Any director or officer may resign at any
time by delivering his resignation in writing to the chairman of
the board, if any, the president, or the secretary or to a
meeting of the board of directors. Such resignation shall be
effective upon receipt unless specified to be effective at some
other time, and without in either case the necessity of its being
accepted unless the resignation shall so state. A director
(including a person elected by directors to fill a vacancy on the
board) may be removed from office with or without cause by the
vote of the holders of a majority of the shares issued and
outstanding and entitled to vote in the election of directors.
The board of directors may at any time remove any officer either
with or without cause, and may at any time terminate or modify
the authority of any agent. No director or officer resigning and
(except where a right to receive compensation shall be expressly
provided in a duly authorized written agreement with the
corporation) no director or officer removed shall have any right
to any compensation as such director or officer for any period
following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month
or by the year or otherwise; unless, in the case of a
resignation, the directors, or, in the case of removal, the body
acting on the removal, shall in their or its discretion provide
for compensation.
ARTICLE VI
VACANCIES
Section 6.1 If the office of the president or the
treasurer or the secretary becomes vacant, the directors may
elect a successor by vote of a majority of the directors then in
office. If the office of any other officer becomes vacant, any
person or body empowered to elect or appoint that officer may
choose a successor. Each such successor shall hold office for
the unexpired term, and in the case of the president, the
treasurer and the secretary until his successor is chosen and
qualified or in each case until he earlier dies, resigns, is
removed or becomes disqualified. Any vacancy of a directorship
shall be filled as specified in Section 3.4 of these by-laws.
ARTICLE VII
CAPITAL STOCK
Section 7.1 Stock Certificates. Each stockholder shall
be entitled to a certificate stating the number and the class and
the designation of the series, if any, of the shares held by him,
in such form as shall, in conformity to law, the certificate of
incorporation and the by-laws, be prescribed from time to time by
the board of directors. Such certificate shall be signed by the
chairman of the board, if any, or the president or a vice
president and by the treasurer or an assistant treasurer or by
the secretary or an assistant secretary. Any or all of the
signatures on the certificate may be a facsimile. In case an
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed on such certificate shall
have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer,
transfer agent, or registrar at the time of its issue.
Section 7.2 Loss of Certificates. In case of the alleged
theft, loss, destruction or mutilation of a certificate of stock,
a duplicate certificate may be issued in place thereof, upon such
terms, including receipt of a bond sufficient to indemnify the
corporation against any claim on account thereof, as the board of
directors may prescribe.
ARTICLE VIII
TRANSFER OF SHARES OF STOCK
Section 8.1 Transfer on Books. Subject to the
restrictions, if any, stated or noted on the stock certificate,
shares of stock may be transferred on the books of the
corporation by the surrender to the corporation or its transfer
agent of the certificate therefor properly endorsed or
accompanied by a written assignment and power of attorney
properly executed, with necessary transfer stamps affixed, and
with such proof of the authenticity of signature as the board of
directors or the transfer agent of the corporation may reasonably
require. Except as may be otherwise required by law, the
certificate of incorporation or these by-laws, the corporation
shall be entitled to treat the record holder of stock as shown on
its books as the owner of such stock for all purposes, including
the payment of dividends and the right to receive notice and to
vote or to give any consent with respect thereto and to be held
liable for such calls and assessments, if any, as may lawfully be
made thereon, regardless of any transfer, pledge or other
disposition of such stock until the shares have been properly
transferred on the books of the corporation.
It shall be the duty of each stockholder to notify the
corporation of his post office address.
Section 8.2 Record Date and Closing Transfer Books. In
order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance,
a record date, which shall not be more than sixty nor less than
ten days (or such longer period as may be required by law) before
the date of such meeting, nor more than sixty days prior to any
other action.
If no record date is fixed:
(a) The record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting
is held.
(b) The record date for determining stockholders entitled
to express consent to corporate action in writing without a
meeting, when no prior action by the board of directors is
necessary, shall be the day on which the first written consent is
expressed.
(c) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on
which the board of directors adopts the resolution relating
thereto.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
ARTICLE XI
CORPORATE SEAL
Section 9.1 Subject to alteration by the directors, the
seal of the corporation shall consist of a flat-faced circular
die with the word "Delaware" and the name of the corporation cut
or engraved thereon, together with such other words, dates or
images as may be approved from time to time by the directors.
ARTICLE X
EXECUTION OF PAPERS
Section 10.1 Except as the board of directors may
generally or in particular cases authorize the execution thereof
in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts or other obligations made, accepted
or endorsed by the corporation shall be signed by the chairman of
the board, if any, the president, a vice president or the
treasurer.
ARTICLE XI
FISCAL YEAR
Section 11.1 The fiscal year of the corporation shall end
on the 31st day of December of each year.
ARTICLE XII
AMENDMENTS
Section 12.1 These by-laws may be adopted, amended or
repealed by vote of a majority of the directors then in office or
by vote of a majority of the stock then outstanding and entitled
to vote. Any by-law, whether adopted, amended or repealed by the
stockholders or directors, may be amended or reinstated by the
stockholders or directors.
1ST AMENDMENT
Dated as of June 30, 1995
TO
NOTE AGREEMENT
Dated as of June 1, 1995
THIS AMENDMENT, dated as of June 30, 1995 is entered into between
Orbital Sciences Corporation, a Delaware corporation (the "Company")
and The Northwestern Mutual Life Insurance Company (the "Purchaser").
RECITALS
The Company and the Purchaser are parties to a Note Agreement dated as
of June 1, 1995 (the "Note Agreement"). The parties now desire to amend
the Note Agreement in certain respects so as to adjust certain
financial tests. In addition, the Company is in default with respect to
one covenant under the Note Agreement and has requested that the
Purchaser grant a waiver with respect to such default;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements of the parties herein contained, the parties agree as
follows:
ARTICLE I - AMENDMENTS
1.1 Section 5.8. Section 5.8 of the Note Agreement is amended to read
in its entirety as follows:
Section 5.8 Fixed Charges Coverage Ratio. The Company will at all times
keep and maintain the Fixed Charges Coverage Ratio at not less than:
DURING THE PERIOD MINIMUM RATIO LEVEL
Closing Date through 1.25 to 1.00
March 31, 1996
April 1, 1996 and 1.50 to 1.00;
thereafter
provided, however that (i) at all times on and before December 31,
1995, the Fixed Charges Coverage Ratio shall be calculated to take into
effect the FAS Adjustment and (ii) at all times on and before March 31,
1996, the Fixed Charge Coverage Test shall be calculated to take into
effect the Pegasus Adjustment.
1.2. Definitions. The following two new definitions shall be inserted
into Section 8. Interpretation of Agreement: Definitions in their
appropriate alphabetical order.
"FAS Adjustment" shall mean an amount equal to the amount set forth in
the financial statements of the Company as at March 31, 1995 (as
restated) to reflect charges resulting from the Company's revaluation
of assets relating to its Transport Orbit Stage a/k/a Orbit Transfer
Stage line of business in connection with the Company's adoption of
Financial Accounting Standard 121, but in no event shall such amount
exceed $4,200,000. The FAS Adjustment shall be excluded from the
calculatlon of Adjusted Consolidated Operating Earnings for the period
set forth in Section 5.8.
"Pegasus Adjustment" shall mean an amount equal to the amount recorded
in the Company's financial statements as at June 30, 1995 to reflect
additional costs associated with and reserves taken in connection with
the failed launch of the Pegasus XL Space Launch Vehicle on June 21,
1995, but in no event shall such amount exceed $4,500,000. The Pegasus
Adjustment shall be excluded from the calculation of Adjusted
Consolidated Operating Earnings for the period set forth in Section
5.8.
ARTICLE ll - WAIVER
Purchaser hereby waives through June 30, 1995 (but not after such date)
any noncompliance by the Company with the provisions of Section 5.8 of
the Note Agreement.
ARTICLE lll - WARRANTIES
To induce the Purchaser to enter into this Amendment, the Company (i)
warrants to the Purchaser that no Default or Event of Default exists
which will not be cured by this Amendment becoming effective and (ii)
restates and reaffirms all of the representations and warranties set
forth in Exhibit B to the Note Agreement.
ARTICLE IV - GENERAL
4.1 Effectiveness. This Amendment shall become effective as of the date
hereof upon receipt by the Purchaser of a counterpart of this Amendment
executed by both parties.
4.2 Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Amendment.
4.3 Reaffirmation. As herein amended, the Note Agreement shall remain
in full force and effect and is hereby ratified, approved and confirmed
in all respects.
4.4 Definitions and References. Terms used but not otherwise defined
herein are used herein as defined in the Note Agreement.
4.5 References. On and after the effective date hereof, each reference
to the Note Agreement therein and in any and all agreements,
instruments, or other documents executed pursuant to or in connection
with the Note Agreement shall be deemed to mean the Note Agreement as
amended hereby.
4.6 Successors and Assigns. This Amendment shall be binding upon the
Company and the Purchaser and their respective successors and assigns,
and shall inure to the benefit of the Company and the Purchaser and the
respective successors and assigns of the Purchaser.
4.7 Sole Holder. Purchaser is the sole Holder of the Notes and has the
power and authority to execute this Amendment pursuant to Section 7 of
the Note Agreement.
Executed by and between the parties as of the date set forth above.
ORBITAL SCIENCES CORPORATION
/s/ Kenneth H. Sunshine
By: Kenneth H. Sunshine
Its: Treasurer
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
/s/ A. Kipp Koester
By: A. Kipp Koester
Its: Vice President
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT No. 2 dated as of July 5, 1995 among
ORBITAL SCIENCES CORPORATION (the "Company"), ORBITAL
IMAGING CORPORATION and FAIRCHILD SPACE AND DEFENSE
CORPORATION, the BANKS listed on the signature pages hereof,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative
Agent (the "Administrative Agent"), and J.P. MORGAN
DELAWARE, as Collateral Agent.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore
entered into an Amended and Restated Credit and
Reimbursement Agreement dated as of September 27, 1994 (as
amended from time to time, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the
Agreement as set forth below;
NOW, THEREFORE, the parties hereto agree as
follows:
SECTION 1. Definitions; References. Unless
otherwise specifically defined herein, each term used herein
which is defined in the Agreement shall have the meaning
assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and
each other similar reference contained in the Agreement
shall from and after the date hereof refer to the Agreement
as amended hereby.
SECTION 2. Additional Permitted Investment.
Section 5.07 of the Agreement is amended by:
(i) deleting the preposition "and" at the end of
clause (d) thereof;
(ii) renumbering clause (e) thereof as clause (f);
and
(iii) inserting a new clause (e) immediately
following clause (d) thereof, to read in its entirety as
follows:
"(e) Investments made by the Company or any of its
Wholly-Owned Subsidiaries, substantially on the terms
described by the Company to the Banks in the "Project
Summary-American Space Lines" dated June, 1995, copies
of which have been delivered to each of the Banks, in
an aggregate principal amount not exceeding
$68,000,000, in any entity or entities through which
the Company or any of its Wholly-Owned Subsidiaries
will participate in the development, construction,
operation and/or marketing of the X-34 small reusable
launch vehicles; and"
SECTION 3. Waiver Under Company Security
Agreement. The Banks waive (i) compliance by the Company
with the terms of Section 4(H) of the Company Security
Agreement solely to the extent necessary to permit the
Company to novate the Cooperative Agreement effective March
30, 1995 between the Company and the National Aeronautics
and Space Administration and (ii) any Default arising under
the Credit Agreement by reason of noncompliance by the
Company with such Section solely as a result of such
novation. Other than as specifically provided herein, this
Section shall not operate as a waiver of any right, remedy,
power or privilege of the Banks under any Financing Document
or of any other term or condition of any Financing Document.
SECTION 4. New York Law. This Amendment shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 5. Counterparts; Effectiveness. This
Amendment may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective upon
receipt by the Administrative Agent of duly executed
counterparts hereof signed by the Borrowers and the Required
Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Administrative
Agent shall have received telegraphic, telex or other
written confirmation from such party of execution of a
counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first
above written.
ORBITAL SCIENCES CORPORATION
By /s/ Carlton B. Crenshaw
Title: Sr. Vice President\
Finance & Administration
and Treasurer
ORBITAL IMAGING CORPORATION
By /s/ Carlton B. Crenshaw
Title: Chief Financial Officer
and Treasurer
FAIRCHILD SPACE AND DEFENSE CORPORATION
By /s/ Carlton B. Crenshaw
Title: Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Kevin J. O'Brien
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J.R. Trimble
Title: Senior Relationship
Manager
SIGNET BANK/VIRGINIA
By /s/ Ronald K. Hobson
Title: Vice President
NATIONSBANK, N.A.
By /s/ James W. Gaittens
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY
By
Title:
THE DAIWA BANK, LIMITED
By /s/ Keith Rauschenberg
Title: Vice President
By /s/ Louanne Baily
Title: Vice President
and Manager
AMENDMENT NO. 3 TO CREDIT AGREEMENT
AMENDMENT No. 3 dated as of August 23, 1995 among
ORBITAL SCIENCES CORPORATION (the "Company"), ORBITAL
IMAGING CORPORATION and FAIRCHILD SPACE AND DEFENSE
CORPORATION, the BANKS listed on the signature pages hereof,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative
Agent (the "Administrative Agent"), and J.P. MORGAN
DELAWARE, as Collateral Agent.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore
entered into an Amended and Restated Credit and
Reimbursement Agreement dated as of September 27, 1994 (as
amended from time to time, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the
Agreement as set forth below;
NOW, THEREFORE, the parties hereto agree as
follows:
SECTION 1. Definitions; References. Unless
otherwise specifically defined herein, each term used herein
that is defined in the Agreement shall have the meaning
assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and
each other similar reference contained in the Agreement
shall from and after the date hereof refer to the Agreement
as amended hereby.
SECTION 2. Decrease in the Minimum Consolidated
Fixed Charges Ratio. Section 5.10 of the Agreement is
amended to read in its entirety as follows:
SECTION 5.10. Consolidated Fixed Charge Ratio.
At the last day of any fiscal quarter, the ratio of Earnings
Available for Fixed Charges to Consolidated Fixed Charges
for the four consecutive fiscal quarters then ended will not
be less than 1.10 to 1. For purposes of this Section 5.10,
the fiscal quarters of the Company ended June 30, 1994 and
June 30, 1995, respectively, shall be excluded from any
determination of any period of four consecutive fiscal
quarters (e.g. the fiscal quarters ended March 31, 1994,
September 30, 1994, December 31, 1994 and March 31, 1995)
shall constitute four consecutive fiscal quarters for
purposes of this Section 5.10).
SECTION 3. Additional Permitted Investment.
Section 5.07 of the Agreement is amended by:
(i) deleting the preposition "and" at the end of
clause (e) thereof;
(ii) renumbering clause (f) thereof as clause (g);
and
(iii) inserting a new clause (f) immediately
following clause (e) thereof, to read in its entirety as
follows:
"(f) Investments made by the Company to acquire
Macdonald, Dettwiler and Associates Ltd. ("MDA"),
substantially on the terms described by the Company to
the Banks in the draft of the Combination Agreement
with respect to such acquisition, a copy of which has
been delivered to each of the Banks, up to an amount
not in excess of the value of 4,800,000 shares of
common stock of the Company; and"
SECTION 4. New York Law. This Amendment shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 5. Counterparts; Effectiveness. This
Amendment may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective on the
date on which the Administrative Agent shall have received
(i) duly executed counterparts hereof signed by the
Borrowers and the Required Banks (or, in the case of any
party as to which an executed counterpart shall not have
been received, the Administrative Agent shall have received
telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party)
and (ii) for the account of each Bank, an amendment fee
equal to 1/8 of 1% of such Bank's Commitment as in effect on
such date.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first
above written.
ORBITAL SCIENCES CORPORATION
By /s/ Carlton S. Crenshaw
Title: Sr. Vice President/Finance
Administrator and Treasurer
ORBITAL IMAGING CORPORATION
By /s/ Carlton B. Crenshaw
Title: Chief Financial Officer
and Treasurer
FAIRCHILD SPACE AND DEFENSE
CORPORATION
By /s/ Carlton B. Crenshaw
Title: Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Kevin J. O'Brien
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J. Alan Edwards
Title: Authorized Signatory
SIGNET BANK/VIRGINIA
By /s/ Ronald K. Hobson
Title: Vice President
NATIONSBANK, N.A.
By /s/ James W. Gaitten
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY
By /s/ J. Andrew Don
Title: Vice President
THE DAIWA BANK, LIMITED
By /s/ Louanne Baily
Title: Vice President
and Manager
By /s/ R.M. Shehorn
Title: SVP & RM MIDWEST
<TABLE>
<CAPTION>
Exhibit 11.
Statement re: Computation
of Earnings Per Share
Three Month Period Ended 1995 Nine Month Period Ended 1995
September 30, September 30,
Assuming Assuming
Primary Full Dilution Primary Full Dilution
<S> <C> <C> <S> <C> <C>
Weighted average of 22,667,006 22,667,006 Weighted average of 21,242,456 21,242,456
outstanding shares outstanding shares
Common equivalent shares: Common equivalent shares:
Outstanding stock options 319,154 319,038 Outstanding stock options 398,179 398,297
Other potentially dilutive Other potentially dilutive
securities: securities:
Convertible debentures N/A 3,895,652 Convertible debentures N/A 3,895,652
Shares used in computing Shares used in computing
net income per share 22,986,160 26,881,696 net income per share 21,640,635 25,536,405
Net income $2,202,289 $2,202,289 Net income ($716,793) ($716,793)
Adjustments assuming Adjustments assuming full
full dilution: dilution:
interest expense, net of N/A 661,500 interest expense, net of N/A 1,984,500
taxes taxes
Net income, assuming full $2,202,289 $2,863,789 Net income, assuming full ($716,793) $1,267,707
dilution dilution
Net income per share $0.10 $0.11 Net income per share ($0.03) $0.05
Dilution percentage N/A -11.2% Dilution percentage N/A -249.9%
assuming full assuming full
dilution (1) dilution (1)
Net income per share used $0.10 $0.10 Net income per share used ($0.03) ($0.03)
Notes:
(1) - Provided that dilution is greater than 3%, the convertible debentures are
considered dilutive in the calculation and presentation of per share data.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS AT AND
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000820736
<NAME> ORBITAL SCIENCES CORP /DE/
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JUL-1-1995
<PERIOD-END> SEP-30-1995
<CASH> 11,200
<SECURITIES> 32,697
<RECEIVABLES> 90,277
<ALLOWANCES> (567)
<INVENTORY> 25,980
<CURRENT-ASSETS> 171,805
<PP&E> 128,199
<DEPRECIATION> (32,932)
<TOTAL-ASSETS> 423,947
<CURRENT-LIABILITIES> 74,681
<BONDS> 93,833
<COMMON> 227
0
0
<OTHER-SE> 238,576
<TOTAL-LIABILITY-AND-EQUITY> 423,947
<SALES> 79,172
<TOTAL-REVENUES> 79,172
<CGS> 57,851
<TOTAL-COSTS> 57,851
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 80
<INTEREST-EXPENSE> 1,247
<INCOME-PRETAX> 3,146
<INCOME-TAX> 944
<INCOME-CONTINUING> 2,202
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,202
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
