Thanks Tom --I've copied it and I'm impressed. IMO, under the scrutiny of so many lawyers, these statements are conservative.
ORBITAL ANSWERS ITS MOST FREQUENTLY ASKED
QUESTIONS
(Dulles, VA 17 March 1999) -- Orbital Sciences Corporation (NYSE: ORB) has received numerous questions from
its shareholders and others interested parties about certain recent events that may have contributed to the
recent decline in the company's share price, as well as a higher-than-normal volume of inquiries about our
general business activities for 1999.
Orbital wants to take this opportunity to provide a representative selection of actual questions it has recently
received along with answers that contain the most current information available.
What is the company's position on the shareholder lawsuits that were recently filed?
For legal reasons, the company is limited in what it can publicly state about the shareholder lawsuits that have
recently been filed. What the company is stating publicly is that it strongly believes the allegations contained in
the shareholder lawsuits are without merit and that a vigorous defense is planned. Orbital also believes that the
negative publicity generated by these lawsuits has been a contributing factor to the recent decline in the price
of the company's shares to a level that does not reflect the true value of its business.
What is Orbital's strategy for merging Lowrance Electronics with Magellan?
One of Orbital's strategies for returning Magellan to stronger growth and consistent profitability has been to
improve its capability to compete effectively in the consumer market for GPS navigators. By combining the
complementary technology, production and distribution strengths of Magellan and Lowrance in the outdoor
recreation and marine markets, Orbital intends to propel Magellan into a leadership role in these markets for GPS
products, while gaining an entirely new and fully developed commercial technology in sonar. At the same time,
Orbital will also increase its ownership position from about 66% of the smaller Magellan prior to the merger, to
about 85% of the newly expanded Magellan that will include Lowrance. When the merger is finalized later this
year, Orbital will be positioned to realize a greater portion of any future Magellan profits.
Did Orbital contribute to the recent failure of NASA's WIRE satellite?
Orbital's role in the WIRE mission was simply to launch the NASA-built, owned and operated satellite into
orbit. The company's Pegasus rocket successfully performed that role, accurately delivering the WIRE satellite
into its intended orbit. Orbital had no role in the design, construction or post-launch operation of the satellite,
during which WIRE encountered technical difficulties that thwarted the completion of the spacecraft's scientific
mission. The WIRE mission was the 12th consecutive successful launch of the Pegasus rocket and the
program's 26th overall mission.
What is the outlook for Orbital's business in 1999?
Orbital believes that 1999 will be a busy and productive year for the company. The company will pursue many
exciting projects throughout the year, some of which represent cutting-edge technologies as well as entirely
new businesses for the commercial space industry. A brief overview of Orbital's sector-by-sector business
outlook for 1999 follows.
Orbital is targeting continued strong revenue growth for its Space and Ground Infrastructure sector, with an
increase of up to 25% in 1999 as compared to last year. In addition, Orbital is working to further improve its
profit margins in this sector and increase its total contract backlog from the current $4.0 billion level to a target
of about $5.0 billion at the end of 1999. Operationally, Orbital is planning to conduct about 10 more rocket
launches this year, maintaining the nearly one launch per month rate the company has established for the past
several years with its Pegasus, Taurus and suborbital launch vehicles. The company's satellite manufacturing
activities will continue at a rapid pace as it makes progress on the over 50 satellites currently on order from
commercial, U.S. Government and international customers. Recently, Orbital broke ground on a new,
ultra-modern “satellite factory” which will enable the company to consolidate all of its satellite manufacturing
activities in one state-of-the-art facility.
Orbital is also aiming to return its Magellan subsidiary to profitability in 1999. The company has implemented
many of its strategies for improving Magellan's financial performance, including introducing numerous new,
higher-margin consumer, automotive and ORBCOMM-related products in early 1999. This year, Magellan will
also begin to realize the benefits of two key joint ventures: the first with Hertz Corp. to manufacture and install
50,000 automobile navigation units in the Hertz rental car fleet in the U.S. and abroad; and the second with
Topcon Corp., a Japanese professional surveying products company with whom Magellan will jointly develop
and market its line of high-precision GPS units. Finally, Orbital is planning to finalize the merger of Lowrance
Electronics with Magellan in this summer, which is intended to strengthen Magellan's competitive standing in
the market for consumer outdoor recreation and marine products.
Finally, Orbital's satellite services sector, made up of the company's ORBCOMM and ORBIMAGE affiliates, is
expected to continue to incur substantial start-up losses in 1999, with the losses beginning to narrow in the
second half of the year. As its subscriber base continues to ramp-up throughout 1999, ORBCOMM revenues
are expected to accelerate in the second half of the year and start to close the gap on the fixed costs that it
currently incurs. ORBIMAGE's high-resolution imagery service is expected to debut following the launch of its
OrbView-3 satellite later this year. In the future, ORBIMAGE plans to launch OrbView-4, its second
high-resolution satellite, in mid-2000, and to begin to distribute worldwide radar imagery from Canada's
RadarSat-2 satellite in late 2001.
What is the current level of ORBCOMM subscribers?
Throughout 1999, we plan to report on the level of ORBCOMM subscribers every three months, along with the
company's quarterly financial results. Orbital will report its first quarter financial results in late April or early
May on a date to be determined in the near future. Meanwhile, the subscriber numbers that we have publicly
discussed include 32,000 total units at year-end 1998, 46,000 total units at the end of January (discussed during
the 1998 year-end financial results conference call in mid-February), and finally, approaching 250,000 total units
that are targeted for the end of 1999.
Why is Mr. Parker stepping down from his full-time position at ORBCOMM to a part-time role?
As had been planned for some time, Mr. Alan Parker has been reducing his role in ORBCOMM's day-to-day
activities after spending ten years with the company and over twenty-five years in the aerospace and
telecommunications industries. For the past 18 months, Mr. Scott Webster, one of Orbital's co-founders, has
been Chairman and CEO of ORBCOMM. The recent press release announcing that Mr. Parker was stepping
down from his position as head of ORBCOMM's international development activities was intended to inform
the ORBCOMM community of Mr. Parker's new role. As stated in the press release, Mr. Parker is remaining on
ORBCOMM's executive team on a part-time basis. His personal decision to reduce his role at ORBCOMM
should not be used as a barometer to gauge ORBCOMM's business outlook, which remains very exciting.
Orbital is one of the largest space and information systems companies in the world, with 1998 revenues of about
$735 million. The company, which is headquartered in Dulles, Virginia, employs over 4,500 people at its major
facilities in nine states and several international locations. Orbital is the world's leading manufacturer of
low-cost space systems and products, including satellites, launch vehicles, electronics and sensors, satellite
ground systems and software, and satellite-based navigation and communications products. Through its
ORBCOMM and ORBIMAGE affiliates, Orbital is also a pioneering operator of satellite networks that provide
data communications and high-resolution imagery services to customers all around the world.
Note: “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995. Certain
“forward-looking statements” contained in these statements involve unknown risks and uncertainties that may
cause the actual results, performance or achievements of the company to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. In particular,
statements concerning Orbital's, ORBCOMM's and ORBIMAGE's objectives, goals, targets, expectations and
future potential profitability are not projections of future performance.
In addition, factors such as general economic and business conditions, product performance, market acceptance
of products and technologies and the ORBCOMM service, and consumer demand, and the ability to
successfully integrate acquired businesses may impact the company's revenues, expenses and profit from
period to period. These factors and others related to the company's business are described in further detail in
the company's SEC filings, including its Form 10-K and Forms 10-Q.
fred |
