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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 1999
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ORBITAL SCIENCES CORPORATION
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DELAWARE 0-18287 06-1209561
(State of incorporation) (Commission File Number) (I.R.S. Employer I.D. No.)
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21700 ATLANTIC BOULEVARD
DULLES, VIRGINIA 20166
(703) 406-5000
(Address and telephone number
of principal executive offices)
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ITEM 5. OTHER EVENTS.
FINANCIAL RESULTS FOR 1998 YEAR-END AND FOURTH QUARTER
On February 16, 1999, Orbital Sciences Corporation ("Orbital" or the "company")
announced its financial results for year-end 1998 and the fourth quarter of
1998. In addition, based on accounting decisions made in connection with the
company's year-end financial statements, the company announced that it would
restate financial results for the quarters ended March 31, June 30 and September
30, 1998. The company filed its Quarterly Reports on Form 10-Q/A (the "Form
10-Q/A's") with the Securities and Exchange Commission on February 19, 1999.
For the year-end 1998, Orbital reported revenues of $734,277,000, an increase of
21% over comparable 1997 revenues of $605,975,000. Orbital generated a net loss
in 1998 of $6,372,000 (or $0.18 per diluted share) as compared to net income of
$23,005,000 (or $0.69 per diluted share) in 1997.
Orbital also reported that it generated fourth quarter 1998 revenues of
$175,914,000, compared to revenues of $176,976,000 in the comparable quarter of
1997. Orbital generated a net loss in the fourth quarter of 1998 of
approximately $19,551,000 (or $0.53 per fully diluted share) compared to net
income of $6,178,000 (or $0.18 per fully diluted share) in the 1997 fourth
quarter.
Financial results for year-end 1998 and the fourth quarter of 1998 were
impacted by non-cash accounting charges that are detailed in the Form 10-Q/A's.
The company's full-year and fourth quarter financial results by business sector
were as follows:
Space and Ground Infrastructure Systems:
For all of 1998, Orbital's space and ground infrastructure systems sector,
including launch vehicles, satellites, electronics and sensors and ground
systems, reported revenues of $617,126,000, an increase of 15% over 1997 annual
revenues of $534,419,000. Infrastructure systems provided net income of
approximately $52,521,000 in 1998, up 15% over 1997 net income of $45,669,000.
For the 1998 fourth quarter, Orbital's infrastructure systems sector reported
revenues of $144,498,000 and provided net income of approximately $3,758,000,
compared to revenues of $156,310,000 and net income of $13,498,000 in the
comparable 1997 quarter.
Satellite Access Products:
The company's satellite access products sector, including Magellan's satellite
navigation, positioning and communications products, and transportation
management systems, generated revenues of $116,392,000 in 1998, an increase of
63% over 1997 revenues of $71,384,000. This sector reported a net loss for the
year of approximately $16,318,000 compared to net income of $5,639,000 in 1997.
The company's satellite access products sector generated revenues of $31,119,000
in the fourth quarter of 1998, an increase of 51% over the 1997 comparable
period revenues of $20,588,000. This sector reported a net loss of $6,109,000 in
the 1998 fourth quarter as compared to net income of $4,170,000 in the 1997
fourth quarter. Net income for the year-end 1997 and the fourth quarter of 1997
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included approximately $18,200,000 of a one-time net gain related to Magellan's
acquisition of Ashtech.
Satellite Services:
The company's satellite services sector, consisting of its ORBCOMM and ORBIMAGE
affiliates, generated revenues of $24,627,000 during 1998, compared to satellite
services revenues of $2,817,000 in 1997. (Orbital generally does not include the
revenue of its satellite services affiliates in its consolidated revenues.)
Satellite services reported a net loss of $42,575,000 in 1998 as compared to net
losses of $28,303,000 in 1997. The company's satellite services sector reported
a net loss of $17,200,000 in the fourth quarter of 1998 as compared to a net
loss of $11,490,000 in the 1997 comparable period.
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Orbital Sciences Corporation
Financial Results Summary
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FULL-YEAR RESULTS:
1998 1997
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Revenues $734,277,000 $605,975,000
Gross Profit $187,556,000 $149,203,000
Operating Income $25,293,000 $29,494,000
Net Income (Loss) ($6,372,000) $23,005,000
Fully Diluted EPS (Loss) ($0.18) $0.69
Firm Backlog at Year End $1,826,000,000 $1,036,000,000
FOURTH QUARTER RESULTS:
Dec. 31, 1998 Dec. 31, 1997
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Revenues $175,914,000 $176,967,000
Gross Profit $38,838,000 $29,837,000
Operating Income ($5,615,000) $193,000
Net Income ($19,551,000) $6,178,000
Fully Diluted EPS ($0.53) $0.18
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LITIGATION
On February 18, 1999, a lawsuit (Switzenbaum vs. Orbital Sciences Corporation)
was filed against the company, an officer and an officer/director, alleging
violations of the federal securities laws during the period from April 21, 1998
through February 16, 1998. The company believes that the allegations are
without merit and intends to vigorously defend against the allegations. The
company has received notice that additional lawsuits with similar allegations
have been filed. The company
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has not yet received a copy of these additional complaints and is therefore
unable to make a meaningful assessment of the alleged violations. At this time,
the company is unable to estimate the potential loss that could result from an
unfavorable outcome of any or all such pending litigation.
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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
Date: February 25, 1999 By: /s/ Jeffrey V. Pirone
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Jeffrey V. Pirone
Executive Vice President and
Chief Financial Officer
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