Orbital Sciences Corporation : ORBITAL ANNOUNCES FIRST QUARTER 2013 FINANCIAL RESULTS
ORBITAL ANNOUNCES FIRST QUARTER 2013 FINANCIAL RESULTS
- Company Reports 31% Growth in Operating Income and 50% Increase in EPS -
- First Quarter Operations Culminate in Weekend's Successful Antares Launch -
(Dulles, VA 23 April 2013) - Orbital Sciences Corporation (NYSE: ORB) today reported its financial results for the first quarter of 2013. First quarter 2013 revenues were $334.8 million, compared to $338.0 million in the first quarter of 2012. First quarter 2013 operating income was $31.1 million, an increase of 31% compared to $23.8 million in the first quarter of 2012.
Net income was $19.6 million, or $0.33 diluted earnings per share, in the first quarter of 2013, compared to net income of $13.0 million, or $0.22 diluted earnings per share, in the first quarter of 2012. Orbital's free cash flow* in the first quarter of 2013 was negative $34.2 million compared to negative $32.7 million in the first quarter of 2012.
Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer, said, "While our revenues did not increase in the first quarter, Orbital reported solid financial results that were driven by operating profit margin improvements in all three of our business segments. Earnings per share increased 50% in the quarter, reflecting these improved operating margins as well as lower interest expense resulting from our recent long-term debt restructuring."
"In addition, the company began 2013 with a series of successful space missions and other operational events, culminating in this weekend's flawless launch of the first Antares rocket. Other recent operations included three interceptor and target vehicle launches, two satellite deployments and four research rocket flights, all of which were successful as well," Mr. Thompson added.
* "Free cash flow" is a non-GAAP financial measure. For additional details concerning this measure, please refer to the sections of this press release entitled "Cash Flow" and "Disclosure of Non-GAAP Financial Measure."
|($ in millions, except per share data)||2013||2012|
|Diluted Earnings Per Share||$0.33||$0.22|
Revenues decreased $3.2 million, or 1%, in the first quarter of 2013 compared to the first quarter of 2012. The marginal decline in revenues was primarily due to a $10.5 million decrease in satellites and space systems segment revenues, partially offset by an $8.2 million increase in launch vehicles segment revenues. The revenue reduction in the satellites and space systems segment was due to decreased activity on communications satellite contracts resulting from the completion of several satellites since the first quarter of 2012. The revenue increase in the launch vehicles segment was driven by increased activity on target launch vehicles and missile defense interceptors. Advanced space programs segment revenues decreased $1.7 million mainly due to decreased activity on national security satellite contracts, partially offset by increased activity on the Commercial Resupply Services (CRS) cargo delivery contract with NASA.
Operating income increased $7.3 million, or 31%, in the first quarter of 2013 compared to the first quarter of 2012, due to operating income increases in all three business segments. Satellites and space systems segment operating income increased $3.5 million principally due to favorable profit adjustments related to two recently deployed satellites. Launch vehicles segment operating income grew $3.1 million principally due to increased target launch vehicle activity in addition to improved profit margins on target launch vehicle and space launch vehicle contracts. Advanced space programs segment operating income increased $0.7 million.
Net income in the first quarter of 2013 was $19.6 million, or $0.33 diluted earnings per share, compared to $13.0 million, or $0.22 diluted earnings per share, in the first quarter of 2012. Interest expense was $2.0 million lower in the first quarter of 2013 compared to the first quarter of 2012, reflecting a reduction in the interest rate on the company's long-term debt resulting from a debt refinancing transaction that the company completed in the fourth quarter of 2012. The company's effective income tax rate was 36% in the first quarter of 2013 compared to 38% in the first quarter of 2012. The first quarter of 2013 included a favorable income tax adjustment of $0.5 million pertaining to federal research and development tax credits.
|($ in millions)||2013||2012||% Change|
Launch vehicles segment revenues increased $8.2 million, or 7%, in the first quarter of 2013 compared to the first quarter of 2012 primarily due to increased activity on target launch vehicles and missile defense interceptors.
Segment operating income increased $3.1 million in the first quarter of 2013 compared to the first quarter of 2012 principally due to increased target launch vehicle activity in addition to improved profit margins on target launch vehicle and space launch vehicle contracts. Segment operating margin increased due to higher profit rates on target launch vehicle and space launch vehicle contracts.
Satellites and Space Systems
|($ in millions)||2013||2012||% Change|
Satellites and space systems segment revenues decreased $10.5 million, or 9%, in the first quarter of 2013 compared to the first quarter of 2012 due to decreased activity on communications satellite contracts, partially offset by increased activity on science and remote sensing satellites. The reduction in communications satellite activity was related to the completion of several satellites since the first quarter of 2012.
Segment operating income increased $3.5 million in the first quarter of 2013 compared to the first quarter of 2012 principally due to favorable profit adjustments resulting from the recent successful deployment of two satellites, in addition to the favorable resolution of a customer claim. Segment operating margin also increased mainly due to the same factors.
Advanced Space Programs
|($ in millions)||2013||2012||% Change|
Advanced space programs segment revenues decreased $1.7 million, or 1%, in the first quarter of 2013 compared to the first quarter of 2012 due to decreased activity on national security satellite contracts, partially offset by increased activity on the CRS contract.
Segment operating income increased $0.7 million in the first quarter of 2013 compared to the first quarter of 2012 principally due to a favorable contract closeout adjustment, partially offset by decreased activity and lower profit margins on national security satellite contracts. Segment operating margin also increased mainly due to the same factors.
|($ in millions)||2013|
|Net Cash Used in Operating Activities||$(25.8)|
|Free Cash Flow||(34.2)|
|Net Decrease in Cash||(32.9)|
|Beginning Cash Balance||232.3|
|Ending Cash Balance||$199.4|
New Business Highlights
In the first quarter of 2013, Orbital recorded approximately $335 million in new firm and option contract bookings. In addition, the company received approximately $105 million of option exercises under existing contracts. As of March 31, 2013, the company's firm contract backlog was approximately $2.0 billion and its total backlog (including options, indefinite-quantity contracts and undefinitized orders) was approximately $4.9 billion.
In the first quarter of 2013, Orbital successfully carried out five major space missions, accomplished important testing milestones for its Antares rocket program, achieved a major system integration milestone on the Cygnus cargo logistics spacecraft and launched three suborbital research rockets. In January, an Orbital OBV long-range missile defense interceptor was successfully launched in support of a test conducted by the U.S. Missile Defense Agency. In February, the Azerspace/AfricaSat-1a commercial communications satellite was successfully launched and completed in-orbit testing milestones and the Landsat-8 Earth remote sensing
satellite was deployed for NASA. Also in February, Orbital successfully conducted a "hot fire" test of the Antares first stage, an important precursor to the successful first launch of the Antares rocket on April 21. In March, Orbital shipped the first Cygnus service module to Wallops Island where it was integrated with its pressurized cargo module, forming the first completed Cygnus spacecraft. During the first quarter, Orbital also launched two low-altitude supersonic targets for the U.S. Navy and three suborbital research rockets on scientific missions for NASA.
For the remainder of the year, Orbital plans to conduct numerous major operational events, highlighted by two additional Antares launches and Cygnus spacecraft deployments to the International Space Station, the introduction of the Minotaur V rocket that will launch NASA's LADEE spacecraft into lunar orbit from Wallops Island, a Pegasus rocket launch carrying a NASA heliophysics satellite, a Minotaur I rocket launch of an Air Force satellite, the deployment of two or three commercial communications satellites, and one or two additional flights of the company's OBV interceptor booster. In addition, the company expects to carry out several target vehicle launches as well as up to 15 additional suborbital research rocket missions. Orbital will also deliver several additional systems for future missions or operational deployments.
2013 Financial Guidance
The company reaffirmed its financial guidance for full year 2013 as follows:
|Revenues ($ in millions)||$1,425 - $1,500|
|Operating Income Margin||7.00% - 7.50%|
|Diluted Earnings per Share||$1.00 - $1.10|
|Free Cash Flow ($ in millions)||$0 - $20|
Annual Stockholders Meeting
Orbital will hold its Annual Meeting of Stockholders, which will include a business update and outlook from Mr. Thompson, at its corporate headquarters on Thursday, April 25, 2013, at 9:00 a.m. Eastern Time. Stockholders and other interested parties may listen to a live audio webcast of the annual meeting by going to Orbital's investor webpage at www.orbital.com/Investor, clicking on the "Webcast" link for the Annual Meeting of Stockholders and following the instructions provided.
Disclosure of Non-GAAP Financial Measure
We define free cash flow as GAAP (U.S. Generally Accepted Accounting Principles) net cash used in operating activities less capital expenditures for property, plant and equipment. A reconciliation of free cash flow to net cash used in operating activities is included above in the section entitled "Cash Flow." Management believes that the company's presentation of free cash flow is useful because it provides investors with an important perspective on the company's liquidity, financial flexibility and ability to fund operations and service debt.
Orbital does not intend for the above non-GAAP financial measure to be considered in isolation or as a substitute for the related GAAP measure. Other companies may define this measure differently.
Orbital develops and manufactures small- and medium-class rockets and space systems for commercial, military and civil government customers. The company's primary products are satellites and launch vehicles, including low-Earth orbit, geosynchronous-Earth orbit and planetary exploration spacecraft for communications, remote sensing, scientific and defense missions; human-rated space systems for Earth-orbit, lunar and other missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. Orbital also provides satellite subsystems and space-related technical services to U.S. Government agencies and laboratories. More information about Orbital can be found at http://www.orbital.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements in this press release may be forward-looking in nature or "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, those related to our financial outlook, liquidity, goals, business strategy, projected plans and objectives of management for future operating results and forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include the words "anticipate," "forecast," "expect," "believe," "should," "will," "intend," "plan" and words of similar substance. Such forward-looking statements are subject to risks, trends and uncertainties that could cause the actual results or performance of the company to be materially different from the forward-looking statement. Uncertainty surrounding factors such as continued government support and funding for key space and defense programs, including the impact of sequestration under the Budget Control Act of 2011, new product development programs, the availability of key product components, product performance and market acceptance of products and technologies, achievement of contractual milestones, government contract procurement and termination risks and income tax rates, as well as other risk factors and business considerations described in the company's SEC filings, including its annual report on Form 10-K, may materially impact Orbital's actual financial and operational results. Orbital assumes no obligation for updating the information contained in this press release.
A transcript of the earnings teleconference call will be available on Orbital's website at http://www.orbital.com/Investor.
Barron Beneski (703) 406-5528
Public and Investor Relations
- attachments below -
ORBITAL SCIENCES CORPORATION
Consolidated Income Statements
(in thousands, except per share data)
|Cost of revenues||246,386||258,964|
|Research and development expenses||32,133||27,878|
|Selling, general and administrative expenses||25,187||27,342|
|Income from operations||31,107||23,846|
|Interest income and other||566||188|
|Income before income taxes||30,563||20,957|
|Basic income per share||$0.33||$0.22|
|Diluted income per share||0.33||0.22|
|Shares used in computing basic income per share||59,776||58,941|
|Shares used in computing diluted income per share||60,061||59,275|
ORBITAL SCIENCES CORPORATION
|Satellites and Space Systems||100.8||111.3|
|Advanced Space Programs||113.3||115.0|
|Income from Operations:|
|Satellites and Space Systems||10.9||7.4|
|Advanced Space Programs||8.2||7.5|
|Total Income from Operations||$31.1||$23.8|
ORBITAL SCIENCES CORPORATION
Condensed Consolidated Balance Sheets
|March 31,||December 31,|
|Deferred income taxes, net||35,240||38,216|
|Other current assets||18,657||17,810|
|Total current assets||891,444||848,823|
|Property, plant and equipment, net||249,673||251,360|
|Other non-current assets||26,511||26,810|
|Liabilities and Stockholders' Equity|
|Accounts payable and accrued expenses||$291,521||$257,113|
|Deferred revenues and customer advances||36,336||62,098|
|Current portion of long-term obligations||8,236||7,500|
|Total current liabilities||336,093||326,711|
|Deferred income taxes, net||15,615||10,879|
|Other non-current liabilities||16,732||17,082|
|Total stockholders' equity||739,323||713,546|
|Total Liabilities and Stockholders' Equity||$1,248,388||$1,211,454|
ORBITAL SCIENCES CORPORATION
Condensed Consolidated Statements of Cash Flows
|Depreciation and amortization||9,824||9,019|
|Deferred income taxes||7,073||7,171|
|Changes in assets and liabilities||(63,584)||(53,015)|
|Net cash used in operating activities||(25,815)||(20,925)|
|Net cash used in investing activities||(8,397)||(11,794)|
|Principal payments on long-term obligations||(1,875)||-|
|Net proceeds from issuance of common stock and other||3,147||455|
|Net cash provided by financing activities||1,272||455|
|Net decrease in cash||(32,940)||(32,264)|
|Cash, beginning of period||232,324||259,219|
|Cash, end of period||$199,384||$226,955|
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Orbital Sciences Corporation via Thomson Reuters ONE
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