Orbit International’s operating leverage part 2

An update on my previous post where I explained the significant operating leverage of Orbit International and why I believed that it was more likely than not that Orbit would be able to take advantage of it by growing revenue.

orbt power

I now believe that it is very likely that Orbit will be able to take advantage of it. A 100% subsidiary, Behlman Electronics Inc, was awarded a 22m USD indefinite-delivery/indefinite-quantity contract last week, of which 12m USD already has been obligated. This award has not been communicated via a press release yet.

Behlman Electronics Inc.,* Hauppauge, New York, is being awarded a $21,709,300 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the production and delivery of up to 180 Common Aircraft Armament Test Sets (CAATS) and 100 Pure Air Generator System Adapter Sets (PAGS PAS) for the Navy and the governments Spain, Italy, Finland, and Kuwait.  These CAATS and PAGS PAS will be used to test various Navy and Marine Corps bomb racks, missile launchers, pylons and rocket launchers at the intermediate maintenance level.  Work will be performed in Hauppauge, New York (53 percent); and Indianapolis, Indiana (47 percent), and is expected to be completed in September 2020.  Fiscal 2016 and 2017 aircraft procurement (Navy) funds in the amount of $11,648,070 will be obligated at time of award, none of which will expire at the end of the current fiscal year.  This contract was competitively procured via an electronic request for proposals as a 100 percent small-business set-aside; three offers were received.  This contract combines purchase for the Navy ($18,452,905; 85 percent); and the governments of Spain ($868,372; 4 percent); Italy ($868,372; 4 percent); Finland ($868,372; 4 percent); and Kuwait ($651,279; 3 percent) under the Foreign Military Sales Program.  The Naval Air Warfare Center Aircraft Division, Lakehurst, New Jersey is the contracting activity (N68335-17-D-0039).

Apart from this contract award, the company also repurchased a tremendous amount of stock, showing their confidence in the future. They repurchased 348,541 shares in the current quarter and 562,473 YTD (13.4% of shares outstanding).

These recent developments, combined with the strong balance sheet make it a very good investment opportunity in my opinion.




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