Orbit International Corp. · OTC:ORBT
Orbit International — Investor Presentation (June 2022)
44 slides from Orbit International's investor presentation, Jun 7, 2022
Slide 1: Orbit International Corp. Overview
ORBIT INTERNATIONAL CORP. OVERVIEW June 7, 2022 P TIN A R O
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS This presentation contains statements concerning Orbit International Corp.’s (“Orbit” or the “Company”) future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limite
Slide 3: Presentation Outline
3 PRESENTATION OUTLINE 1 INTRODUCTION 4 FINANCIALS Orbit at a glance and introduction to our senior Key financial performance metrics. management team and directors. 2 MARKETS AND PRODUCTS 5 STRATEGY Orbit focuses on key defense and industrial A combination of both organic and acquisitive market opp
Slide 4: Introduction to Orbit International
INTRODUCTION TO ORBIT INTERNATIONAL The short story.
Slide 5: About Us
5 ABOUT US Known by the company we keep. Orbit companies have been trusted worldwide to provide the most rugged and innovative hardware, software, and integrated systems for the military and major industries since 1957.
Slide 6: The Basics
6 THE BASICS • Orbit International Corp. (“Orbit” or the “Company”) was originally founded in 1957, and is based in Hauppauge, New York, approximately 49 miles from New York City. All manufacturing and corporate activities, with the exception of those of Simulator Product Solutions LLC (“SPS”), occu
Slide 7: Orbit at a Glance
7 ORBIT AT A GLANCE 3.46 million $7.10 SHARES OUTSTANDING PRICE PER SHARE Approximately 70% As of June 3, 2022. held by Fifty-two-week range between management and directors. $5.50 - $8.29. Public float approximately 1 million shares. Average daily volume 588 shares. $24.5 million $19.2 million MARK
Slide 8: Orbit at a Glance
8 ORBIT AT A GLANCE Fiscal year-ending December 31, 2021 (unaudited) $22.2 million $17.9 million ANNUAL REVENUE BACKLOG While representing a decline in sales Inclusive of acquired Simulator from the prior year, gross margin Product Solutions LLC (“SPS”) significantly improved to 36.8%. backlog. $2.2
Slide 9: Orbit at a Glance
9 ORBIT AT A GLANCE Fiscal year-end December 31, 2021 (unaudited) $9.2 million 7.2:1 CASH CURRENT RATIO Prior to SPS acquisition on January 3, 2022. Current assets of $21.2 million Approximately $5.1 million after acquisition. versus current liabilities of $2.95 million. $26 million $20.2 million TO
Slide 10: Transformational
10 TRANSFORMATIONAL Acquisition on January 3rd of Panel Products, Inc. by $6.5 million $5.32 million AGREED ENTERPRISE VALUE FISCAL 2021 REVENUE Paid $4.0 million in cash, plus up to $1.2 million of Approximate 7% increase in revenue earn-outs over fiscal years 2022 and 2023 based over fiscal 2020.
Slide 11: Orbit at a Glance
11 ORBIT AT A GLANCE First quarter ending March 31, 2022 versus 2021 (unaudited and inclusive of results of SPS) $6.8 million $15.3 million versus versus $5.4 million $15.8 million REVENUE BACKLOG 26.9% year-over-year increase. Inclusive of $2.5 million of SPS backlog in 2022. $738,000 $658,000 vers
Slide 12: Senior Management Team
12 SENIOR MANAGEMENT TEAM Seasoned. Invested. Dedicated. MITCHELL BINDER President DAVID GOLDMAN and KARL SCHMIDT Chief Executive Officer Chief Financial Officer Chief Operating Officer and Treasurer Collectively, senior management owns slightly more than 5% of Orbit’s equity. MARCUS BRYANT NABIL RA
Slide 13: Senior Sales Team
13 SENIOR SALES TEAM Experienced. Knowledgeable. Incentivized. WILLIAM MOSHER Senior Vice President JOEPOZZOLANO Business Development MARK PRIETO Simulator Product Solutions LLC Senior Vice President Senior Vice President Sales and Marketing Sales and Marketing Power Group Electronics Group
Slide 14: Outside Directors
14 OUTSIDE DIRECTORS Outside directors directly represent holders of approximately 65% of Orbit’s equity securities. BERNARD KARCINELL WILLIAM COLLINS WAYNE CADWALLADER Mr. Karcinell was first elected to Orbit’s board in Mr. Collins was first elected to Orbit’s board in 2018 and is the Mr. Cadwallad
Slide 15: Markets and Products
MARKETS AND PRODUCTS Military. Oil and Gas. Industrial. Transportation. Medical.
Slide 16: Addressable Markets
16 ADDRESSABLE MARKETS Through our electronics and power groups we address several key markets. MILITARY / AEROSPACE OIL AND GAS TRANSPORTATION UTILITIES RAILROAD AND AIR TRAFFIC CONTROL TELECOMMUNICATIONS
Slide 17: Product Categories
17 PRODUCT CATEGORIES Through our electronics and power groups we meet the needs of key market participants. MILITARY HUMAN MACHINE INTERFACE (“HMI”) Orbit Instrument has become the trusted supplier of choice for ultra-rugged operator interface devices and software solutions for military, government
Slide 18: Military Human Machine Interface
18 MILITARY HUMAN MACHINE INTERFACE Through our electronics and power groups we address several key markets. $155 MILLION MARKET - PROJECTED CAGR OF 4.5% According to a December 2021 research study published by Knowledge Sourcing Intelligence the HMI for cockpit displays market is projected to witne
Slide 19: Displays and Bezels
19 DISPLAYS AND BEZELS Through our electronics and power groups we address several key markets. $1.7 BILLION MARKET - PROJECTED CAGR OF 7% According to a February 9, 2022 study published by The Insight Partners, the military rugged display market is expected to grow from $1.7 billion in 2021 to $2.7
Slide 20: Military Simulation
20 MILITARY SIMULATION Through our electronics and power groups we address several key markets. $13 BILLION MARKET - PROJECTED CAGR OF 4.75% According to a February 2022 research study published by VPAResearch, the global military simulation market was valued at $12.4 billion in 2021 and is expected
Slide 21: Power Supplies
21 POWER SUPPLIES Through our electronics and power groups we address several key markets. $15 BILLION MARKET - PROJECTED CAGR OF 3.1% According to a December 3, 2021 study published by Precision Reports, the global rugged power supply market was valued at $14.8 billion in 2020 and is expected to re
Slide 22: Divisions
DIVISIONS Market Driven. Synergistic. Respected.
Slide 23: Our Divisions
23 OUR DIVISIONS Orbit International Corp. is the parent company of both the Orbit Electronics Group and the Orbit Power Group. ELECTRONICS GROUP POWER GROUP When the military and government require operator interfaces that can stand Behlman Electronics delivers the widest array of high-reliability
Slide 24: Electronics Group Customers
24 ELECTRONICS GROUP CUSTOMERS Orbit Instrument, TDL, Q-Vio, and SPS compliment each other. MULTI-FUNCTION DISPLAYS Orbit designs and manufactures a wide array of BEZELS ultra-rugged, mil-spec compliant, customized When lives depend on precise, efficient displays of all types, sizes and shapes, to m
Slide 25: Power Group Customers
25 POWER GROUP CUSTOMERS Behlman Electronics manufactures COTS (MIL Standard Compliant) power products. AIRBORNE GROUND / MOBILE With over 60 years experience in the design and Behlman’s COTS airborne, shipboard, ground and manufacture of critical electronic equipment in its mobile power supplies ar
Slide 26: Financial
FINANCIAL Select highlights for fiscal 2017 through Q1 2022.
Slide 27: Revenue
27 REVENUE Fiscal year-end December 31st. Fiscal 2021 does not include proforma SPS revenue for year. Revenue Fiscal year-end December 31st Fiscal 2021 does not include proforma SPS revenue for the year. 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 2017 2018 2019 2020 2021 Tota
Slide 28: Gross Margin
28 GROSS MARGIN 40 Fiscal year-end December 31st. 35 30 Percentag 25 e 20 Gross Margin was significantly negatively impacted during the 2018, 2019, and 2020 fiscal years as a result of the extremely low margin derived from a company set aside program undertaken by Orbit’s power group in association
Slide 29: Selling, General & Administrative
29 SELLING, GENERAL & ADMINISTRATIVE Fiscal year-end December 31st. 6,800 6,600 Thousands 6,400 6,200 6,000 2017 2018 2019 2020 2021 2017 through 2018 includes approximately $175,000 of S,G&A costs related to discontinued operations, and 2019 is inclusive of costs associated with the acquisition of
Slide 30: Adjusted EBITDA
30 ADJUSTED EBITDA Fiscal year-end December 31st. 2,500 2,250 2,000 1,750 Thousands 1,500 1,250 1,000 750 500 2017 2018 2019 2020 2021 Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, fair value adjustment on contingent liability and stock-based compensat
Slide 31: Stock Buybacks
31 STOCK BUYBACKS Since 2012 Orbit has repurchased approximately 1.4 million, or 30%, of its total shares at a total cost of approximately $5.6 million.
Slide 32: Growth Strategy
GROWTH STRATEGY Organic growth combined with opportunistic and synergistic accretive acquisitions.
Slide 33: The Predicate
33 THE PREDICATE US DEFENSE SPENDING IS PREDICTED TO INCREASE TO $915 BILLION IN 2031. Source: https://www.statista.com/statistics/217577/outlays-for-defense-and-forecast-in-the-us/.
Slide 34: Growth Strategy
34 GROWTH STRATEGY Four ingredients to build shareholder value. ORGANIC GROWTH 1 Increased focus on existing customer base to pursue both new opportunities and recurring and refurbishment programs, coupled with tight cost containment policies. FOCUS ON VPXTRA™ TECHNOLOGY 2 Behlman’s proprietary VPXt
Slide 35: Organic Growth
35 ORGANIC GROWTH OPG - Continued increase in business utilizing our VPXtra™ technology. OPG - Increase in commercial business for our power supplies used for railroads, oil and gas exploration, and test and measurement that weakened during the last two years of the pandemic. Q-Vio - Potential high
Slide 36: VPXtra Technology
36 VPXTRA™ TECHNOLOGY OUR POWER GROUP’S VPXtra™ TECHNOLOGY BOOKINGS CONTINUE TO EXPERIENCE STRONG GROWTH.
Slide 37: Military Simulation
37 MILITARY SIMULATION MARKET DRIVERS High Costs Associated with Live Training Encourage the Adoption of Simulation - Live military training requires a huge and expensive logistical effort, but simulation is safer and more cost-effective. To Lower Defense Expenditures Developed Countries Continue to
Slide 38: Main Street M&A Target Rich Environment
38 MAIN STREET M&A TARGET RICH M&A ENVIRONMENT In excess of 5,000 “Main Street” companies with revenues between $2 and $10 million in Orbit’s target NAICS codes.
Slide 39: Main Street M&A Average EBITDA Multiple
39 MAIN STREET M&A THE “MAIN STREET” AVERAGE EBITDA MULTIPLE WAS 3.9 IN Q4 OF 2021 COMPARED TO 7.5 FOR TRANSACTIONS VALUED IN EXCESS OF $10 MILLION. Source: * DealStats Value Index Digest 1Q 2022 published by bvresources.com. ** GF Data as per https://middlemarketgrowth.org/gf-data-mid-market-multip
Slide 40: Investment Thesis
INVESTMENT THESIS Orbit represents an attractive mid-term investment for the value investor.
Slide 41: Trading Multiples – Peer Group
41 TRADING MULTIPLES – PEER GROUP As of March 10, 2022. WHEN COMPARED TO THE PEER GROUP, WHICH INCLUDES COMPANIES WITH ANNUAL REVENUES OF BETWEEN $13 AND $58 MILLION, ORBIT SHARES ARE SIGNIFICANTLY UNDERVALUED. Company Comp Set Company Name TEV/Total Revenues LTM - TEV/EBITDA LTM - Latest TEV/EBIT L
Slide 42: Compelling Value Proposition
42 COMPELLING VALUE PROPOSITION Textbook value investing with significant upside. VALUE ORIENTED Orbit shares trade at an approximate 13% premium to their stated book value per share which does not include impact of usable tax loss carryforwards. CAPITAL ALLOCATION UNLEVERAGED INCREASED Orbit return
Slide 43: Quote from Chuck Akre
43 “WE WANT COMPANIES THAT ARE POSITIONED TO WITHSTAND ALMOST ANY ECONOMIC ENVIRONMENT AND THAT HAVE THE FINANCIAL RESOURCES TO TAKE ADVANTAGE OF OPPORTUNITIES AS THEY APPEAR, BE IT ACQUIRING NEW ASSETS, OR REPURCHASING THEIR OWN SHARES AT VERY ATTRACTIVE PRICES.” Quote from Chuck Akre Founder Akre
Slide 44: Thank You
THANK YOU. MBINDER@ORBITINTL.COM
Orbit International — Investor Presentation (June 2022) on 6ix