UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington,  DC  20549

                                  FORM  10-K
(Mark  One)

X    ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
-    ACT  OF  1934  for  the  fiscal  year  ended  December  31,  2008

     or

     TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF THE SECURITIES
     EXCHANGE  ACT  OF  1934  for  the  transition  period  from ____ to ____

                            Commission  File  No.  0-3936

                        ORBIT  INTERNATIONAL  CORP.
         (Name  of  registrant  as  specified  in  its  charter)

             DELAWARE                                       11-1826363
(State  or  Other  Jurisdiction  of                      (I.R.S.  Employer
   Incorporation  or  Organization)                      Identification  No.)


80  CABOT  COURT,  HAUPPAUGE,  NEW  YORK                     11788
(Address  of  principal  executive  offices)              (Zip  Code)

Registrant's  telephone  number,  including  area  code:  (631)  435-8300

Securities  registered  pursuant  to  Section  12(b)  of  the  Exchange  Act:

COMMON STOCK, $.10 PAR VALUE PER SHARE        NASDAQ CAPITAL MARKET
------------------------------------  --------------------------------------
           (TITLE OF EACH CLASS)     (NAME OF EACH EXCHANGE ON WHICH REGISTERED)

Securities  registered  pursuant  to  Section  12(g)  of  the Exchange Act: None

Indicate  by  check  mark  if the registrant is a well-known seasoned issuer, as
defined  in  Rule  405  of  the  Securities  Act.
     Yes               No X
                         ---
Indicate  by  check  mark  if  the  registrant  is  not required to file reports
pursuant  to  Section  13  or  Section  15(d)  of  the  Act.
     Yes                    No X
                              ---
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the Registrant was
required to file such reports), and (2) been subject to such filing requirements
for  the  past  90  days.
   X  Yes              No
  ---
Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  Registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  X
            ---
Indicate  by  check mark whether the Registrant is a large accelerated filer, an
accelerated  filer,  a  non-accelerated  filer,  or a smaller reporting company.
__  Large  accelerated  filer     __ Accelerated  Filer
__  Non-accelerated  filer        X  Smaller  reporting  company
                                 ---

Indicate  by check mark whether the Registrant is a shell company (as defined in
Rule  12b-2  of  the  Act).Yes     No X
                                     ---
Aggregate  market value of Registrant's voting and non-voting common equity held
by  non-affiliates  (based  on  shares  held and the closing price quoted on the
Nasdaq  Capital  Market  on  June  30,  2008):  $25,900,653

Number  of  shares  of  common stock outstanding as of March 18, 2009: 4,603,297

Documents incorporated by reference: The Registrant's definitive proxy statement
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act  of  1934  in  connection  with  the  Registrant's  2008  Annual  Meeting of
Stockholders.

PART  I
-------


ITEM  1.          DESCRIPTION  OF  BUSINESS

GENERAL

     Orbit International Corp. (the "Company" or "Orbit") was incorporated under
the laws of the State of New York on April 4, 1957 as Orbit Instrument Corp.  In
December  1986, the state of incorporation was changed from New York to Delaware
and in July 1991, the name was changed to Orbit International Corp.  The Company
conducts  its  operations  through  its Orbit Instrument Division and its wholly
owned  subsidiaries,  Behlman Electronics, Inc.("Behlman") and Tulip Development
Laboratory,  Inc.  ("TDL")  and  its  affiliated  manufacturing  company,  TDL
Manufacturing,  Inc.  ("TDLM")(collectively  "Tulip")  and Integrated Consulting
Services,  Inc.,  d/b/a  Integrated  Combat  Systems ("ICS"), acquired effective
December  31,  2007.  Through  its Orbit Instrument Division, which includes its
wholly  owned  subsidiaries, Orbit Instrument of California, Inc. and Tulip, the
Company  is engaged in the design, manufacture and sale of customized electronic
components  and subsystems. ICS, based in Louisville, Kentucky, performs systems
integration  for  gun  weapons  systems  and  fire control interface, as well as
logistics  support  and  documentation.  Behlman.  is  engaged in the design and
manufacture  of distortion free commercial power units, power conversion devices
and  electronic  devices  for  measurement  and  display.

On December 19, 2007, the Company completed the acquisition of all of the issued
and  outstanding stock of ICS effective December 31, 2007. The total transaction
value  was  approximately  $6,700,000 consisting of $5,400,000 in cash, of which
$4,500,000  was  funded  by  a  five  year  term  loan  from its primary lender,
approximately  120,000  shares of Orbit stock valued at approximately $1,000,000
and  approximately  $300,000  in  acquisition  costs.  Additionally,  there is a
contingent  earn  out of $1,000,000, payable over the next three years, based on
ICS's  ability to attain certain revenue levels in each year over the three year
period  2008  through  2010.  Such  revenue  level  was  not  attained  in 2008.

FINANCIAL  INFORMATION  ABOUT  INDUSTRY  SEGMENTS

     The  Company  currently  operates in two industry segments. The Electronics
Group  is  comprised  of  the  Company's  Orbit  Instrument  Division, its Tulip
subsidiary,  and  its  ICS  subsidiary,  commencing  December  31,  2007.  Orbit
Instrument  Division  and  Tulip  are  engaged  in the design and manufacture of
electronic  components  and  subsystems. ICS performs system integration for gun
weapons  systems  and  fire  control  interface as well as logistics support and
documentation.  The Power Group is comprised of the Company's Behlman subsidiary
and  is  engaged  in  the  design  and  manufacture  of  commercial power units.


The  following  sets  forth  certain  selected  historical financial information
relating  to  the  Company's  business  segments:


                                                 December 31,
                                                 ------------
                                       2008                    2007(1)
                                     --------                  -------

Net sales (2):
---------
Electronics Group
     Domestic                      $15,678,000                 $15,503,000
     Foreign                         1,851,000                   1,162,000
                                   -----------                 -----------
Total Electronics Group            $17,529,000                 $16,665,000


Power Group
     Domestic                      $ 8,605,000                 $ 8,207,000
     Foreign                         1,516,000                   1,013,000
                                    ----------                 -----------
Total Power Group                  $10,121,000                 $ 9,220,000


Operating income (loss) (3):
-----------------------

Electronics Group                  $(6,059,000)                 $2,666,000
Power Group                        $ 1,643,000                  $1,232,000

Assets:
------

Electronics Group                  $12,888,000                 $10,504,000
Power Group                        $ 5,834,000                 $ 5,668,000

(1)  Does  not  include  the  operations of ICS since the acquisition was not
     effective  until  December  31,  2007.
(2)  Includes intersegment sales.
(3)  Exclusive of corporate overhead expenses, interest expense, and
     investment and other income- net, which are not allocated to the business
     segments. Includes goodwill impairment charge of $6,889,000 in 2008.

     Additional financial information relating to the business segments in which
Orbit  conducts  its  operations  is  set  forth  in Note 17 to the Consolidated
Financial  Statements  appearing  elsewhere  in  this  report.



DESCRIPTION  OF  BUSINESS

GENERAL

Orbit's  Electronics  Group  designs,  manufactures and sells customized panels,
components,  and  "subsystems"  for  contract  program  requirements  to  prime
contractors,  governmental  procurement  agencies  and  research and development
("R&D") laboratories. The Group primarily designs and manufactures in support of
specific  military programs. More recently, the Company has focused on providing
commercial, non-military "ruggedized hardware" (hardware designed to meet severe
environmental  conditions)  for  prime  contractor  programs at cost competitive
prices.  Products  include a variety of custom designed "plasma based telephonic
intercommunication  panels"  for  secure  voice  airborne  and shipboard program
requirements,  "full-mil  keyboards",  "trackballs"  and  "data  entry  display
devices".  The Electronics Group's products, which in all cases are designed for
customer  requirements  on  a  firm  fixed  price  contract  basis,  have  been
successfully  incorporated  on  surveillance  aircraft programs, including E-2C,
E-2D,  Joint  Surveillance  Target  Attack  Radar  Systems  (J/STARS),  Lookdown
Surveillance Aircraft (AWACS) and P-3 (anti-submarine warfare) requirements, and
shipboard  programs,  including  AEGIS (Guided Missile Cruisers and Destroyers),
DDG'S  (Guided Missile Destroyers), BFTT (Battle Force Tactical Training), LSD'S
(Amphibious Warfare Ships) and LHA'S (Amphibious Warfare Ships) applications, as
well  as  a  variety  of  land based guidance control programs including the TAD
(Towed Artillery Digitization) fire control system. Through ICS, the Electronics
Group  also  performs  (i)  analysis  and evaluation of medium and major caliber
Naval  Gun  Weapon  Systems  performance,  including  interoperability  and
compatibility with combat systems, interface systems, ammunition, subsystems and
components,  (ii)  engineering  requirements such as the design, integration and
production  of medium and major caliber Naval Gun Weapon Systems' components and
(iii)  engineering  supplies and services in support of medium and major caliber
Naval  Gun  Weapon Systems initiatives, including the development of test plans,
test  equipment,  test  articles/units,  analyses,  trouble  shooting,  repair,
maintenance  and  reporting.

     Orbit's Power Group manufactures and sells power supplies, AC power sources
(equipment that produces power that is the same as what would be received from a
public  utility), "frequency converters" (equipment that converts local power to
equivalent  foreign  power),  "uninterruptible  power supplies ("UPS")" (devices
that  allow  a  computer  to  operate  while  utility power is lost), associated
analytical  equipment  and other electronic equipment.  The military division of
Behlman  designs  and  manufactures  "power  conversion devices" (equipment that
produces power that is the same as what would be received from a public utility)
and  electronic  products  for  measurement  and  display.


PRODUCTS

Electronics  Group


     IFF-  Identification  Friend  or  Foe

     Orbit  Instrument  has designed and developed a Remote Control Unit ("RCU")
that has supported the Common Transponder ("CXP") program for both U.S. Navy and
U.S.  Army  program  requirements.  Orbit's  RCU  has  been  fully qualified for
shipboard,  aircraft  and  ground  based  programs, which are now functional and
supporting  U.S. forces in air, sea and ground battlefield conditions. The Orbit
RCU  now  has  embedded  proprietary  software code for Mode S, Enhanced Traffic
Alert  and  Collision  Avoidance  Systems  ("ETCAS"),  and  Mode  5  IFF  combat
applications.

     After  shipping more than 3,000 units in support of U.S. Army and U.S. Navy
CXP  program  requirements,  Orbit  has  designed and qualified a new Integrated
Remote  Control Unit ("IRCU") which has been qualified to support U.S. Air Force
retrofit,  as  well  as  new  program  opportunities.

     Intercommunication Panels

     The  Orbit  Instrument Division has designed and developed various types of
shipboard  communication  terminals.  Orbit  also  upgraded  these  panels  with
state-of-the-art  displays  and  touch  screens.  These  communication terminals
support  existing  shipboard secure and non secure voice communication switches.
In  addition, the Orbit Instrument Division has also upgraded the communications
Terminals  with  "telco-based"  capability. The upgraded communication terminals
are  installed  on  combat  information  centers  of  various  U.S. Naval ships.

The  Orbit  Instrument  Division has designed and developed the next generation,
Color  LCD  flat  panel technology with a touch screen based Computer Controlled
Action  Entry  Panel  for the AEGIS Class Ships. The new Color Entry Panel (CEP)
replaces  our  existing  Plasma  Entry  Panel  (PEP).  The  CEP has already been
successfully  manufactured  and  tested  on  several  platforms.

     Displays

     The Electronics Group, through the Orbit Instrument Division and Tulip, has
designed,  developed,  qualified and successfully supported a number of critical
programs  for  prime  contractor and government procurement agency requirements.
The  Electronics  Group  has  designed displays using Electroluminescent ("EL"),
Plasma, and Liquid Crystal Display ("LCD") technologies, for military and rugged
environments.

     Displays  designed  by  Orbit's  Electronics  Group  allow an operator, or,
multiple  operators  to  monitor  and  control  radar  systems  for  aircraft,
helicopter, shipboard, ground based, and tracked vehicles systems on a number of
critical  defense  electronics  programs.  The  unique  modular design technique
allows  Orbit's displays to provide "smart technology", consisting of high-speed
graphics  to  operators  in  the  most severe combat conditions. Tulip and Orbit
Instrument displays are designed to meet both sunlight readable and night vision
(NVIS"),  and  continue  to  operate  after  exposure to nuclear, biological and
chemical  ("NBC")  environments.


     Both Orbit Instrument and Tulip have penetrated a niche defense electronics
marketplace  by  providing  avionic  displays  and keyboards for a number of Air
Force  jet fighter, bomber, surveillance and tanker refueling programs. Displays
may  vary from four (4) inches, up to forty five (45) inches long, incorporating
multiple  inputs  and  outputs  for  operator  program  requirements.

     With  years  of prime contractor and procurement agency support, both Tulip
and  Orbit have designed and embedded displays for U.S. Army programs, providing
multiple  display  systems  supporting  commander,  fire  control and GPS driver
requirements  for  the  Abrams,  Bradley,  and  Challenger  programs.

     Tulip has developed a number of color LCD displays that have been qualified
and  currently  support a number of helicopter, jet fighter, bomber, and tracked
vehicle  programs  requirements.

     Orbit  Instrument  has  supported  programs  that  now  include  displays,
keyboards  and  track  balls  to form complete operator systems. These trays are
qualified  for  sub-surface,  shipboard,  aircraft  and  tracked vehicle program
opportunities.

     Tulip  has  successfully  designed  and  qualified an Input Device Assembly
("IDA"),  which  includes  a  fully  integrated  keyboard, trackball and display
assembly  that  is  worn  (via  Velcro),  on  the co-pilot's thigh during flight
missions.  This  unique  wearable  system  provides  co-pilots  with  additional
information  that  is easy to access, and does not require additional space with
the cockpit environment. This allows the aircraft to actually have four bullnose
systems,  the  last  being  the  Tulip  designed  IDA  thigh  pad.

     Keyboards,  Keypads  and  Pointing  Devices

     The  Orbit  Instrument  Division and Tulip have designed a number of custom
backlit  keyboards  and  keypads  to  meet  full military specifications.  These
keyboards  and  keypads  have been designed for shipboard, airborne, sub-surface
and  land  based  program  requirements,  as  well  as  for the Federal Aviation
Administration.  The  keyboards  include  various  microprocessor  based  serial
interfaces, such as RS-232, RS-422, PS/2, USB and SUN type interfaces. Depending
on  the  requirement,  some  of  the  backlit  keyboards are night vision goggle
compatible  and  designed for NVIS Green A or Green B night vision requirements.

     Orbit  designed/developed  pointing  devices,  trackballs and force sticks.
Orbit manufactures various militarized trackballs in various sizes for airborne,
shipboard,  Army  and  FAA  requirements.  The  trackballs  and the force sticks
include  various  microprocessor based serial interfaces such as RS-232, RS-422,
PS/2,  USB  and  SUN  type  interfaces.




     Operator Control Trays

     The  Orbit  Instrument  Division  designs  and  manufactures  a  variety of
"operator  control  trays"  that  help  organize  and  process  data  created by
interactive  communications  systems,  making  such  data  more  manageable  for
operator  consumption.  These  trays  are  presently  used to support patrol and
surveillance  airborne  aircraft  programs,  "standard shipboard display console
requirements"  and  shore  land based defense systems applications. The operator
trays  are  integrated  with  Orbit  designed/developed  keyboards,  flat  panel
technology  based  computer  controlled  action  entry panels, switch panels and
pointing  devices.

     Command  Display  Units  (CDU'S)

The  Orbit  Instrument  Division currently has orders for command display panels
that  are  being  utilized  for  vehicular,  shipboard  and  sheltered  platform
requirements.  The  display panels are flat panel technology based and include a
Pentium  based single board computer. Orbit designed/developed several models of
the  CDU  to  be used by U.S. Navy, U.S. Army and  U.S. Marines,  and the Korean
and  Canadian  armies.

     Mobile  Key  Panel  Receivers

Tulip  is  under  contract for the production of mobile key panel receivers that
provide  battlefield operators with real time position, velocity, navigation and
timing  (PVNT)  information  in  a  stand  alone,  hand-held,  lightweight
configuration.

     MK  119  Gun  Console  System  Computer  (GCSC)

      ICS  is  under  multi-year  contract  for  the  MK  119  GCSC, an unmanned
environmentally  isolated  shipboard  enclosure  that  houses a standard 19 inch
electronics rack containing processors, electronic devices and cooling and power
conditioning  equipment that perform processing, interfacing and data extraction
functions.

     MK  437  Gun  Mount  Control  Panel  (GMCP)

      ICS  is  also  under contract for the GMCP, a manned control panel located
shipboard  in the Gun Loader room.  The GMCP consists of an interactive operator
control/display  terminal that provides operator interactions with the Gun Mount
and  the  GCSC  to  allow  the  operator  to  enter ammunition and environmental
pre-engagement data and allows monitoring of the Gun Mount status and operation.
In  the event of a loss of the Gun Console (GC) the GMCP can serve as a casualty
mode  of  system  operation.

     Selected Products

     ICS  builds a wide range of system integration related products, including:
fiber optic cables, specialty enclosures, traditional shipboard cable sets (both
low  smoke  and  non-low  smoke)  and  training  devices.

Power  Group

     Behlman's  Commercial  Power  Supply  Division  designs and manufactures AC
power  sources.  These  products  are  used  for  clean  regulated power and for
frequency  and voltage conversion applications.  Behlman's AC power supplies are
used  on  production lines, in engineering labs, for oil and gas exploration, on
aircraft  and  ships  (both  manned and unmanned), and on related ground support
systems.

Behlman's  frequency  converters are used to convert power from one frequency to
another.  They  are  used  to  test products to be exported to foreign countries
from  the  point  of origin (e.g., in the U.S., 60 Hz. is converted to 50 Hz) to
test  products requiring supply 400 Hz aircraft and ship power.  These frequency
converters  are  also used in rugged applications such as on airplanes to supply
the  60  Hz.  required  by standard equipment such as computers from the 400 Hz.
available  on  the aircraft.  In addition, Behlman's products are being used for
railroad  signaling; its frequency converters are being manufactured for most of
the  passenger  railroads  in  the  United States.  Behlman's power sources have
power  levels  from  100  VA  to  120,000  VA.

Behlman's  UPS  products  are  used  for  backup power when local power is lost.
Behlman  only  competes  in  the  "ruggedized", industrial and military markets.
Behlman  is  now  producing  its  UPS units for Aegis Destroyers, LHD Wasp Class
ships  and  military  aircraft.

Behlman's  inverters  which convert system battery power to AC are being used in
electric,  gas  and  water  transmission  systems  and  in  utility substations.

Behlman's  Custom  Power Supply Division designs and manufactures power supplies
that  use  commercial-off-the-shelf  (COTS) power modules to meet its customers'
environmental  specifications.  This  technique  requires  less  engineering and
produces  a  more  reliable  unit in much less time.  Customers include the U.S.
military  services  and  nuclear  power  plant  control  systems  manufacturers.

     Behlman  also performs reverse engineering of analog systems for the United
States Government or United States Government contractors to enable them to have
a  new  supplier  when  the  old  manufacturer  cannot  or  will  not supply the
equipment.

Behlman  is  a  long  time  supplier to the Source Development Department of the
NAVICP  and has been given the opportunity to compete against prime contractors.
Behlman has supplied power supplies used on a broad array of equipment including
submarines,  surface  ships,  aircraft  and  ground  support  equipment.

     Behlman  also  operates  as a qualified repair depot for many United States
Air  Force  and  Navy  programs.

PROPOSED  PRODUCTS

Electronics  Group

     The  Orbit  Electronics  Group  has  continued  to  identify  new  program
opportunities,  which require new hardware and software designs to support prime
contractors  and  defense  procurement  agency  land,  sea  and  air  solutions.

     Tulip  continues  to be a leading supplier of display and keyboard designs,
supporting  defense  electronics  and industrial program requirements. Tulip has
developed  a  second  LCD  display  configuration,  which  is supporting transit
authority  communication  directly  with  the  driver.  This device is typically
mounted  within  a  bus,  and allows the driver to input and receive information
throughout  the  intended  route. The significance of this market penetration is
the  specific transit authority operational requirements, where down time due to
repeated  failures  is  not  an  option.  Tulip  continues  to  support  this
transportation  display  requirement,  and can provide solutions to each transit
authority  as  new  awards  are  released.

     The  Electronics  Group  has developed several new color smart displays for
use  on  helicopter  programs. Given the critical requirements of the helicopter
missions,  each  configuration  has  been  designed  as sunlight readable, night
vision  qualified  displays  that  provides  the  crew with real time data under
extreme  environmental  combat  requirements.

     The  Electronics  Group  continues  to  provide  a  family  of  display
configurations  that are designed with latest state-of-the art technologies, and
combines  various stand alone switch panels and data input devices onto a single
display.  These  displays  provide  an  operator with a single source of easy to
access  information  that  supports  naval  consoles,  aircraft  cockpits, armor
vehicle  suites  and  helicopter  cockpit  requirements.

     The Orbit Instrument Division has designed and developed a 6.5" display, as
well  as  a  sunlight  readable  20.1"  display  for the U.S. Navy's Carrier MCS
programs.  Orbit  also  has  designed  and developed an 8" display for U.S. Navy
ships  as  part  of  the  NBC  detection  program.

     The  Orbit Instrument Division continues to develop new GPS Control Display
Unit  ("CDU") panels that support U.S. Army land navigation system requirements.
A  number  of  CDU  panels  have  been designed as a total solution for customer
requirements.  As each foreign country procures this Fire Finder system from the
prime  contractor, critical country mapping and targeting code is written by the
division  segment,  and  embedded  into  the  CDU as an operational requirement.

     The  Electronics Group continues to target ongoing retrofit programs, which
are  intended to extend the life cycle of ships, aircraft, and armored vehicles.
To  that  extent, the Orbit Instrument Division and Tulip have designed state of
the art LED switch panels, keyboards, and communication panels that are form fit
and  replaceable  for units that have exceeded their intended operational usage.
In  all  cases,  the  new  technological  designs  supporting the switch panels,
keyboards,  and  communication panels are intended to replace Orbit units, which
have  been  operational  in  combat  mode  for decades. As the Electronics Group
continues  to  receive new contract awards for program opportunities, developing
replacement  hardware to obsolete our previously designed units will continue to
be  a  significant  part  of  the  Group's  business  strategy.

     In  response to market based influences ICS is planning to develop a family
of  shock-isolated  cabinets  to  house  both  custom and COTS components.  This
family  of  cabinets  will  be  qualified  to the full spectrum of environmental
criteria  mandated  by  our  Department  of  Defense  customer  base.

     Future modifications of the GCSC will incorporate touch sensitive displays,
detailed  built-in-test  capabilities  and  a  robust  graphic  interface.

Power Group

     In  an  effort to expand its product base, Behlman is developing new higher
power  inverters.  These  products  are designed to expand Behlman's presence in
the  utility  market and to establish a presence in the military inverter market
to  be  used  on  vehicles  such  as  Hummers.

Behlman  is  expanding  its high power BL series to be used on new aircraft that
utilize  "wild  frequency"  systems.

Behlman  is  expanding  its  P series of low cost AC power supplies to add power
factor  corrected  input  and  CE  marking  in order to enhance its sales to the
European  Community.

Behlman  is  developing  a new line of ruggedized UPS to be used in military and
high  end  industrial  applications.

In  response  to customer requests, Behlman is developing COTS power supplies to
be  used  in  applications such as satellite, nuclear power plant control, sonar
and  fire  control  optics.  Behlman  continues  to  be the company of choice by
certain  divisions  of  military procurement to replace obsolete power equipment
with  modern  COTS  versions.

SALES  AND  MARKETING

     Products  of  the Electronics Group are marketed by the sales personnel and
management  of  the  respective operating units.  Military products of the Power
Group  are marketed by Behlman's sales and program managers and other management
personnel.  Commercial  products  of  the Power Group are sold by regional sales
managers,  manufacturer's  representatives  and  non-exclusive  distributors.

COMPETITION

     Many  of our competitors are well established, have reputations for success
in  the  development  and  sale  of  their  products  and  services  and  have
significantly  greater  financial,  marketing, distribution, personnel and other
resources  than  us,  thereby permitting them to implement extensive advertising
and  promotional  campaigns,  both  in  general  and  in  response to efforts by
additional  competitors to enter into new markets and introduce new products and
services.


     The  electronics  industry is characterized by frequent introduction of new
products  and  services,  and  is  subject  to changing consumer preferences and
industry  trends,  which  may  adversely  affect  our ability to plan for future
design, development and marketing of our products and services.  The markets for
electronic  products,  components and related services are also characterized by
rapidly  changing technology and evolving industry standards, often resulting in
product  obsolescence  or short product life cycles.  We are constantly required
to  expend  more  funds  for  research  and  development  of  new  technologies.

     The  Electronics  Group's  competitive  position  within  the  electronics
industry  is,  in  management's  view,  predicated  upon  the  Orbit  Instrument
Division's,  Tulip's  and  ICS's manufacturing techniques, its ability to design
and manufacture products which will meet the specific needs of its customers and
its  long-standing  relationship  with  its  major  customers.  (See  "Major
Customers"  below).  There  are  numerous  companies, many of which have greater
resources  than  the  Company,  capable  of  producing  substantially all of the
Company's  products.  However,  to  the  Company's  knowledge,  none  of  such
competitors  currently  produce  nearly all of the products that the Electronics
Segment  produces.

     Competition  in  the  markets for the Power Group's commercial and military
products  depends on such factors as price, product reliability and performance,
engineering  and  production.  In  particular,  due  primarily  to  budgetary
restraints  and  program  cutbacks,  competition  in  Behlman's  United  States
Government  markets  has been increasingly severe and price has become the major
overriding  factor  in  contract  and  subcontract  awards.  To  the  Company's
knowledge,  some  of  Behlman's  regular  competitors  include  companies  with
substantially  greater capital resources and larger engineering, administrative,
sales  and  production  staffs  than  Behlman's.



SOURCES AND AVAILABILITY OF RAW MATERIALS

The  Company  uses  multiple sources for its procurement of raw materials and is
not  dependent  on  any suppliers for such procurement. The Company continuously
updates  its delivery schedules and evaluates availability of components so that
they  are received on a "just-in-time schedule". Occasionally, in the production
of  certain  military  units,  the  Company will be faced with procuring certain
components  that  are  either  obsolete  or  difficult  to procure. However, the
Company  has  access to worldwide brokers using the Internet to assure component
availability.  Nevertheless, there can be no assurance that such components will
be  available,  and  even  if  so,  at  reasonable  prices.

MAJOR  CUSTOMERS

     Various  agencies of the United States Government and BAE Systems accounted
for  approximately  27%  and 11%, respectively, of consolidated net sales of the
Company  for  the  year  ended  December  31,  2008.  The  loss  of any of these
customers  would have a material adverse effect on the net sales and earnings of
the Company.  The Company does not have any significant long-term contracts with
any  of  the  above-mentioned  customers.

     The  major  customers  of the Electronics Group are various agencies of the
United States Government, BAE Systems, and General Dynamics, Inc, accounting for
approximately  36%, 17%, and 10%, respectively, of the net sales of such segment
for  the year ended December 31, 2008.  The loss of any of these customers would
have  a material adverse effect on the net sales and earnings of the Electronics
Group.

     The  major  customers of the Power Group are various agencies of the United
States  Government  and  Baker  Hughes Inc. accounting for approximately 12% and
10%,  respectively, of the net sales of such segment for the year ended December
31,  2008.  The  loss of these customers would have a material adverse effect on
the  net  sales  and  earnings  of  the  Power  Group.

     Since  a  significant  amount  of  all  of  the  products which the Company
manufactures  are  used  in  military applications, any substantial reduction in
overall  military  spending  by  the  United  States  Government  could  have  a
materially  adverse  effect  on  the  Company's  sales  and  earnings.

BACKLOG

As  of  December  31,  2008  and  2007  the  Company's  backlog  was as follows:


                                             2008                     2007
                                             ----                     ----

               Electronics Group         $ 9,000,000             $9,000,000
               Power Group                 7,000,000              6,000,000
                                          -----------            ----------

                               Total     $16,000,000            $15,000,000
                                          ===========           ===========

          The  backlog  of  the  Electronics Group at December 31, 2007 included
$1,600,000  of  backlog  attributable  to  ICS.

     All  but  approximately  $600,000  of  the  backlog  at  December 31, 2008,
represents  backlog under contracts that are expected to be shipped during 2009.

     The  backlog  at  December  31, 2008 and December 31, 2007 does not include
approximately  $1,100,000  and  $3,800,000,  respectively,  of  orders  not  yet
received  under  a  Master  Order Agreement received from a customer whereby the
Company  was  authorized  to  procure  material  to  complete  such  orders.

     A  significant amount of the Company's contracts are subject to termination
at  the  convenience  of  the  United  States  Government.  The  backlog  is not
influenced  by  seasonality.

SPECIAL  FEATURES  OF  UNITED  STATES  GOVERNMENT  CONTRACTS

     Orders  under  United States Government prime contracts or subcontracts are
customarily subject to termination at the convenience of the U.S. Government, in
which  event  the contractor is normally entitled to reimbursement for allowable
costs  and  a  reasonable  allowance  for  profits,  unless the termination of a
contract  was  due  to  a  default  on  the  part  of  the  contractor.

During  the year ended December 31, 2007, the Power Group was a subcontractor to
a  prime  contractor  on  a  program that was terminated by the U.S. Government,
under which the Company recovered all its costs of approximately $200,000 during
the  current  year  ended  December 31, 2008.  No other material terminations of
contracts  of either the Electronics Group or the Power Group at the convenience
of  the  U.S.  Government  occurred during the years ended December 31, 2008 and
2007.

A  significant  portion of the Company's revenues are subject to audit under the
Vinson-Trammel  Act  of  1934  and other federal statutes since they are derived
from  sales under United States Government contracts.  The Company believes that
adjustments to such revenues, if any, will not have a material adverse effect on
the  Company's  financial  position  or  results  of  operations.

RESEARCH  AND  DEVELOPMENT

     The  Company  incurred  approximately $1,398,000 and $1,203,000 of research
and  development  expenses  during  the  years ended December 31, 2008 and 2007,
respectively.  During  the  years  ended December 31, 2008 and 2007, the Company
recognized  revenue  of  approximately  $649,000 and $690,000, respectively, for
customer  funded  research  and  development.

PATENTS

     The  Company  does  not  own  any patents which it believes are of material
significance  to  its  operations.

EMPLOYEES

     As  of March 13, 2009, the Company employed 146 persons, all on a full-time
basis  except  for  two  part-time  employees.  Of  these, the Electronics Group
employed 93 people, consisting of 27 in engineering and drafting, 6 in sales and
marketing,  19  in  direct  and  corporate  administration  and  the  balance in
production.  The Power Group employed 53 people, consisting of 15 in engineering
and  drafting,  7  in  sales,  3  in direct and corporate administration and the
balance  in  production.

ITEM  1A.     RISK  FACTORS

     This  report and other reports filed by us with the Securities and Exchange
Commission  contain certain forward-looking statements within the meaning of the
Private  Securities  Litigation  Reform Act of 1995. Actual results could differ
materially from those projected in the forward-looking statements as a result of
certain  uncertainties  set forth below and elsewhere in this report, as well as
additional  risks and uncertainties of which we are currently unaware.  See Item
7.  "Management's  Discussion and Analysis of Financial Condition and Results of
Operations-Forward  Looking  Statements".



RISKS  RELATING  TO  THE  COMPANY

WE  ARE  HEAVILY DEPENDENT UPON THE CONTINUANCE OF MILITARY SPENDING AS A SOURCE
OF  REVENUE  AND  INCOME.

     A  significant  amount  of  all  the  products  we  manufacture are used in
military  applications.  The  attacks of September 11, 2001 and subsequent world
events  have  led the U.S. Government to increase the level of military spending
necessary  for  domestic  and  overseas  security.  However,  due to the current
financial  crisis,  the  U.S.  Government  has directed vast amounts of funds to
support  those areas of our economy that are under considerable strain.   Due to
budget  constraints,  these  actions could potentially have an adverse impact on
the  level  of  future defense spending.  We are heavily dependent upon military
spending  as  a  source  of  revenues  and income.  Accordingly, any substantial
future reductions in overall military spending by the U.S. Government could have
a  material  adverse  effect  on  our  sales  and  earnings.

TIGHT  LENDING  CONDITIONS  COULD  AFFECT  OUR  OPERATIONS.

     As  a  result of lower profitability related to customer shipping delays in
the first and second quarter of 2008, the Company was not in compliance with two
of  its  financial  covenants  at  September  30,  2008.  In  November 2008, the
Company's  primary  lender  waived  the covenant default of two of its financial
ratios at September 30, 2008 and the Company renegotiated the financial covenant
ratios for the quarterly reporting periods December 31, 2008 and March 31, 2009.
Beginning June 30, 2009, the covenants will revert back to their original ratios
with  a  modification  to  a  certain  financial ratio covenant definition.  The
Company was in compliance with all its financial covenants at December 31, 2008.
However,  as  a  result of the recent financial crisis, all lending institutions
have  re-evaluated their lending conditions and existing loans are under greater
scrutiny.  In  addition,  our  primary  lender  Merrill Lynch Commercial Finance
Corp.  is  now  owned  by  Bank of America and with this change of ownership and
accompanying  losses  it is more uncertain whether any covenant defaults will be
waived  in  the  future.  Accordingly,  in  the  event that the Company incurs a
reduction  in  expected profitability in the future that causes another covenant
default,  there is no assurance that its lender will waive such covenant default
or  renegotiate  the financial covenants.  In addition, they could impose severe
restrictions  on  how  the  Company would operate its business as well as higher
lending  costs  which  could  further  reduce  profitability.

CURRENT  WORLDWIDE  ECONOMIC  CONDITIONS  MAY  ADVERSELY AFFECT OUR BUSINESS AND
RESULTS  OF  OPERATIONS

     Current  worldwide  economic  conditions  which  may  still worsen, make it
difficult  for our customers, our vendors and us to accurately forecast and plan
future  business activities which, among other things, caused us to stop issuing
guidance  forecasts.  Such  economic  conditions could cause both government and
commercial  customers  to  extend  deliveries  on  existing contracts. We cannot
predict the timing or duration of the current economic slowdown or the timing or
strength  of a subsequent economic recovery, worldwide, or in the United States.
If  there  is further economic deterioration, our business, financial condition,
and  results  of  operations  could  be  materially  and  adversely  affected.
Additionally,  our  stock  price  has  continued  to  decrease  from the lack of
investor  confidence  in  the  securities  markets  which  have  been negatively
impacted  by  the  worldwide  economic  downturn.

WE COULD ENCOUNTER DIFFICULTIES IN PROCURING CONTRACTS BECAUSE OF A REDUCTION IN
THE  LEVEL  OF  INDUSTRY-WIDE  FUNDING  AND  PRICING  PRESSURES.

We  continue  to pursue many business opportunities, including programs in which
we  have  previously participated but, in the event of industry-wide funding and
pricing  pressures,  we could encounter delays in the awards of these contracts.
We  continue  to  seek  new  contracts  which require incurring up-front design,
engineering,  prototype  and  pre-production  costs.  While we are attempting to
negotiate  contract awards for reimbursement of product development, there is no
assurance  that  sufficient monies will be set aside by our customers, including
the  U.S.  Government, for such effort. In addition, even if the U.S. Government
agrees to reimburse development costs, there is still a significant risk of cost
overrun,  which may not be reimbursable. Furthermore, once we have completed the
design  and  pre-production  stage,  there  is no assurance that funding will be
provided  for  future  production.

     A  significant  amount  of  our contracts are subject to termination at the
convenience  of  the  U.S.  Government.  Orders  under  U.S.  Government  prime
contracts  or  subcontracts  are  customarily  subject  to  termination  at  the
convenience  of  the  U.S. Government, in which event the contractor is normally
entitled  to  reimbursement  for  allowable costs and a reasonable allowance for
profits,  unless  the termination of a contract was due to a default on the part
of  the  contractor.

WE  ARE  DEPENDENT  ON CERTAIN OF OUR CUSTOMERS AND WE DO NOT HAVE ANY LONG-TERM
CONTRACTS  WITH  THESE  CUSTOMERS.

          Various  agencies  of  the  United  States  Government and BAE Systems
accounted  for  approximately  27%,  and  11%, respectively, of consolidated net
sales  of  the Company for the year ended December 31, 2008. Various agencies of
the  U.S.  Government,  BAE  Systems  and  General  Dynamics, Inc. accounted for
approximately  36%,  17%  and  10%,  respectively,  of  the  net  sales  of  our
Electronics  Group for the year ended December 31, 2008. Various agencies of the
U.S.  Government and Baker Hughes Inc. accounted for approximately 12%, and 10%,
respectively,  of  the  net sales of our Power Group for the year ended December
31,  2008.  We  do  not have any significant long-term contracts with any of the
above-mentioned  customers.  The  loss  of  any  of these customers would have a
material  adverse  effect  on  our  net  sales  and  earnings.    Due  to  major
consolidations  in  the  defense industry, it has become more difficult to avoid
dependence  on  certain  customers for revenue and income. However, the sales to
many of our prime contractors may consist of sales to various units or divisions
within  that  Company.

WE  ARE  DEPENDENT  UPON OUR SENIOR EXECUTIVE OFFICERS AND KEY PERSONNEL FOR THE
OPERATION  OF  OUR  BUSINESS.

     We  are  dependent  for  the  operation  of our business on the experience,
technology  knowledge,  abilities and continued services of our senior officers,
Dennis  Sunshine,  President  and  Chief  Executive  Officer,  Bruce  Reissman,
Executive  Vice  President  and  Chief  Operating  Officer, and Mitchell Binder,
Executive  Vice  President  and  Chief  Financial  Officer  as well as the Chief
Operating  Officers  at each of our operating units. The loss of services of any
of  such  persons  would  be expected to have a material adverse effect upon our
business  and/or  our  prospects.  Our  future  success is dependent upon, among
other  things,  the  successful  recruitment  and  retention  of  key  personnel
including  executive officers, for sales, marketing, finance and operations.  We
face significant competition for skilled and technical talent.  No assurance can
be  made  that we will be successful in attracting and retaining such personnel.
If  we  are  unable  to retain existing key employees or hire new employees upon
acceptable  terms  when  necessary,  our business could potentially be adversely
affected.

WE  MAY  NOT  BE  SUCCESSFUL  IN  OUR  EXPANSION  EFFORTS.

          Part  of  our  business  strategy  is to expand our operations through
strategic  acquisitions.  Through  the  past  several years, we reviewed various
potential  acquisitions  and  believe there are numerous opportunities presently
available,  although  there was increased competition among private equity firms
and  other  entities  seeking  similar  type  acquisitions.  In  April  2005, we
completed  the  acquisition  of  Tulip  and  in  December 2007, we completed the
acquisition  of  ICS.  However,  due  to  current  economic  conditions  and the
financial  crisis,  it will be increasingly difficult to secure financing in the
event  we should identify a suitable acquisition candidate. Even if we were able
to obtain the necessary financing to complete additional acquisitions, there can
be  no  assurance  that  we  will have sufficient income from operations of such
acquired  companies  to satisfy the interest payments, in which case, we will be
required  to pay them out of Orbit's operations which may be adversely affected.
Furthermore,  there can be no assurance we will be able to successfully complete
the  integration  of any future acquired business and that such acquisition will
be  profitable  and  enable  us  to  grow  our  business.

WE  MAY  NOT RECOVER ALL COSTS RESULTING FROM EARLY TERMINATION OF UNITED STATES
GOVERNMENT  CONTRACTS

          Orders  under United States Government prime contracts or subcontracts
are  customarily  subject  to  termination  at  the  convenience  of  the  U.S.
Government,  in which event the contractor is normally entitled to reimbursement
for  allowable  costs  and  a  reasonable  allowance  for  profits,  unless  the
termination  of  a  contract was due to a default on the part of the contractor.
The Company may commit significant funds for non-recurring costs associated with
a  contract. Upon an early termination the Company may not recover a significant
portion  of  such  non-recurring  costs. Although the one early termination of a
U.S.  Government  contract  during  the  last  two years did not have a material
adverse affect on the Company's business or financial condition, there can be no
assurance  this  will  not  occur  in  the  future.


WE  HAVE  HAD  AND  MAY  CONTINUE  TO  HAVE  IMPAIRMENT  OF  GOODWILL

     The Company has significant intangible assets related to goodwill and other
acquired  intangibles.  In  determining the recoverability of goodwill and other
intangibles,  assumptions  are  made  regarding  estimated future cash flows and
other  factors  to determine the fair value of the assets.  After completing the
impairment testing of goodwill and other intangible assets pursuant to Statement
of  Financial  Accounting  Standards  No.  142,  "Goodwill  and Other Intangible
Assets"  ("SFAS  142"), the Company concluded an impairment charge of $6,889,000
should  be  taken  at December 31, 2008 in connection with the recorded goodwill
arising  from  its  acquisitions  made  between  2005 and 2007.  This impairment
charge  was  also  driven  by  a decrease in the Company's market capitalization
caused by current economic conditions and the financial crisis.  If estimates or
their  related  assumptions used in the current testing change in the future, or
should the Company's market capitalization decrease further due to deteriorating
market  conditions,  the  Company  may  be required to record further impairment
charges  for  those  assets  not  previously  recorded.


WE  MAY HAVE DIFFICULTY PROCURING CERTAIN RAW MATERIALS ON TERMS SATISFACTORY TO
US.

          We  use  multiple sources for our procurement of our raw materials and
we  are  not  dependent  on  any  suppliers for such procurement.  Occasionally,
however,  in  the  production  of  certain  military units, we may be faced with
procuring  certain  components that are either obsolete or difficult to procure.
Although we believe that with our access to worldwide brokers using the Internet
we  can  obtain  the  necessary  components, there can be no assurance that such
components  will  be  available,  and  even  if  so,  at  reasonable  prices.


ITEM  1B.     UNRESOLVED  STAFF  COMMENTS

          Not  applicable,  as  the  Company  is  a  smaller  reporting company.



ITEM  2.     PROPERTIES

     The  Company  owned  its  plant  and executive offices, located at 80 Cabot
Court,  Hauppauge,  New  York,  which  consists  of 60,000 square feet (of which
approximately  50,000 square feet are available for manufacturing operations) in
a two-story, brick building, which was completed in October 1982 and expanded in
1985.  The  Company  is currently operating at approximately 70% of capacity. In
March  2001,  the Company completed a sale leaseback transaction whereby it sold
its  land  and  building for $3,000,000 and entered into a twelve-year net lease
with  the  buyer  of  the property.  The lease provides for an annual payment of
$360,000 with 10% increases in the fourth, seventh and tenth years of the lease.
The  lease  expires  in February 2013, but may be extended by the Company at its
option  through  2025.  During  the  extension period, the lease provides for an
annual  rent  of  $527,076  with  10% increases in the fourth, seventh and tenth
years  of  the  extended  lease.

     In  December 2007, Behlman entered into a new lease for a 2,000 square foot
facility  at 2363 Teller Road, Unit 108, Newbury Park, California, which is used
as  a  selling  office  for  all of the Company's operating units. The five year
lease  provides  for  monthly  payments  of  approximately  $2,100  with  annual
increases  of approximately 3%. The lease provides for an option to renew for an
additional five years at a monthly rent equal to the rent charged for comparable
space  in  the  geographical  area.




On April 4, 2005, Tulip entered into a five-year lease for 19,000 square feet at
1765  Walnut  Drive,  Quakertown, Pennsylvania, which is used for manufacturing,
engineering  and administration. The facility is operating at full capacity. The
lessor  of  this  facility  is  a limited partnership, the ownership of which is
controlled  by  the former shareholders of Tulip. The lease provides for monthly
payments  of  $9,100  for  the  first year and increases by 2% each year for the
first  two renewal periods and by 3% for the final two renewal periods. Tulip is
currently  seeking to relocate to a larger facility in the same geographic area.

ICS  operates  out of two facilities in Louisville, KY, one of which is used for
engineering,  logistics  and administration and the other for manufacturing.  In
December  2008,  ICS  entered  into  a  new lease for engineering, logistics and
administration  for  approximately  14,000  square feet and provides for monthly
payments  of  approximately  $5,900  through  March  2009  and  increases  to
approximately  $6,800  per month from April 2009 through March 2014 and includes
an  option  to  extend  the  lease for an additional five years at approximately
$8,400  per  month.  The facility is currently operating at approximately 65% of
capacity.  The  lease for manufacturing space is for approximately 13,000 square
feet  and  provides  for  monthly  payments  of  approximately $4,300. The lease
expires  in  March  2009  and  includes  an  option  to  extend the lease for an
additional  five  years  at  115%  of  the  current  rent(which  option has been
exercised).  The  facility  is  currently  operating  at  approximately  85%  of
capacity.  ICS  also  entered  into  a  three  year  lease for a sales office in
Virginia Beach, VA, which consists of approximately 800 square feet and provides
for  monthly  rent  of approximately $1,000.  The lease expired in December 2008
and  ICS  did  not  renew  it.


ITEM  3.     LEGAL  PROCEEDINGS


There  are  no  material  pending  legal  proceedings  against  the  Company.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


          None.


                                    PART II
                                    -------


ITEM  5.          MARKET  FOR  REGISTRANT'S  COMMON  EQUITY, RELATED STOCKHOLDER
MATTERS  AND  ISSUER  PURCHASES  OF  EQUITY  SECURITIES








The  Company's  common  stock  is  quoted on the Nasdaq Capital Market under the
symbol  ORBT.



The  following  table  sets forth the high and low sales prices of the Company's
common stock for each quarter from January 1, 2007 through its fiscal year ended
December  31,  2008,  as  reported  on  the  Nasdaq  Capital  Market.





                                  HIGH                  LOW
                                  ----                  ---

2007:

First Quarter:                   $8.43                 $7.04
Second Quarter:                   9.35                  7.38
Third Quarter:                    9.67                  6.84
Fourth Quarter:                   9.30                  8.02

2008:

First Quarter:                   $9.28                 $7.43
Second Quarter:                   8.00                  6.75
Third Quarter:                    7.00                  3.75
Fourth Quarter:                   4.53                  1.12

HOLDERS
     As  of  March  12,  2009,  the  Company  had  231  shareholders  of record.
DIVIDENDS
     The  Company  has  not paid or declared any cash dividends to date and does
not  anticipate  paying  any  in the foreseeable future.  The Company intends to
retain  earnings,  if  any,  to  support  the  growth  of  the  business.



PERFORMANCE  GRAPH
     The  graph  below  compares  the cumulative total shareholder return on the
Common  Stock for the last five fiscal years with the cumulative total return on
the  Nasdaq  Stock  Market-U.S.  Index  ("Nasdaq Composite"), Dow Jones Wilshire
MicroCap and a peer group of comparable companies (the "Peer Group") selected by
the  Company over the same period (assuming the investment of $100 in the Common
Stock,  the Nasdaq Composite, Dow Jones Wilshire MicroCap. and the Peer Group on
December  31,  2003,  and  the  reinvestment  of  all  dividends).


                              [GRAPHIC OMITTED]



                              [GRAPHIC OMITTED]


                COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
                     AMONG ORBIT INTERNATIONAL, THE NASDAQ
                     STOCK MARKET-US INDEX AND A PEER GROUP
                                (in  dollars)
          Orbit
          International      Peer                             Dow  Jones
          Corp.              Group            Nasdaq        Wilshire  MicroCap

12/03       100.00           100.00            100.00             100.00
12/04       150.27           135.66            110.06             117.18
12/05       207.67           155.61            112.92             118.60
12/06       136.00           165.42            126.61             136.25
12/07       144.00           205.60            138.33             124.64
12/08        29.50           160.06             80.65              68.58


     *  The  Peer Group is comprised of six companies in the defense electronics
industry  -Megadata Corp., La Barge, Inc., Miltope Group Inc., DRS Technologies,
Inc.,  Esterline  Technologies  Corp.,  and  Espey Manufacturing and Electronics
Corp.  Such  companies  were chosen for the Peer Group because they have similar
market  capitalizations to the Company and/or because they represent the line of
business  in  which  the  Company is engaged.  Each of the Peer Group issuers is
weighted  according  to  its  respective  market  capitalization.


SECURITIES  AUTHORIZED  FOR  ISSUANCE  UNDER  EQUITY  COMPENSATION  PLANS


     The  following  table  sets  forth,  as  of  December  31,  2008:

-     the  number of shares of the Company's common stock issuable upon exercise
of  outstanding  options,  warrants  and  rights, separately identified by those
granted     under  equity incentive plans approved by the Company's stockholders
and  those granted under plans, including individual compensation contracts, not
approved  by  the  Company's  stockholders  (column  a),

-     the  weighted average exercise price of such options, warrants and rights,
also  as  separately  identified  (column  b),  and

-     the  number  of  shares remaining available for future issuance under such
plans,  other  than  those shares issuable upon exercise of outstanding options,
warrants  and  rights  (column  c).

EQUITY COMPENSATION PLAN INFORMATION TABLE

<TABLE>
<CAPTION>
<S>                                  <C>                           <C>                       <C>
                                     (a)                           (b)                        (c)
Plan Category                         Number of securities to be    Weighted-average         Number of securities
                                      issued upon exercise of       exercise price of        remaining available for
                                      outstanding options,          outstanding options,     future issuance under
                                      warrants and rights           warrants and rights      equity compensation
                                                                                             plans (excluding
                                                                                             securities reflected in
                                                                                             column (a))

Equity compensation plans
approved by security holders                 591,000                     $ 3.19                  277,000

Equity compensation plans not
approved by security holders                   -0-                         N/A                     -0-
                                             -------                     ------                  -------

Total                                        591,000                     $ 3.19                  277,000
                                             =======                     ======                 ========
</TABLE>

<TABLE>
<CAPTION>


ISSUER'S PURCHASE OF EQUITY SECURITIES:

<S>                     <C>               <C>                  <C>                       <C>
                        (a)               (b)                  (c)                       (d)
                                                               Total Number of           Maximum Number(or
                        Total                                  Shares(or Units)          Approximate Dollar Value)
                        Number of                              Purchased as part of      of Shares(or Units) that May
                        Shares (or Units) Average Price Paid   Publicly Announced        Yet be Purchased Under the
Period                  Purchased         per Share(or Unit)   Plans or Programs         Plans or Programs
-------                 ---------         ------------------   ------------------        -----------------------------
October 1- 31, 2008       35,435               $ 3.26                35,435                     $ 2,776,000
November 1-30, 2008       71,733               $ 1.92                71,733                     $ 2,638,000
December 1-31, 2008      103,418               $ 1.62               103,418                     $ 2,470,000
                        --------               ------              --------                    --------------
Total                    210,586               $ 2.00               210,586                     $ 2,470,000
</TABLE>

Additional information relating to the Issuer's purchase of equity securities is
provided  in Item 7. Management's Discussion and Analysis of Financial Condition
and  Results  of  Operations.

RECENT  SALE  OF  UNREGISTERED  SECURITIES

          As  previously  reported  by  the Company on Form 8-K for December 19,
2007,  approximately  120,000  shares of unregistered common stock was issued in
connection  with  the  ICS  acquisition.  During 2008, the Company issued 40,245
shares  of  unregistered  restricted  stock  to  management  and  key employees.

ITEM 6.     SELECTED FINANCIAL DATA

          Not  applicable,  as  the  Company  is  a  smaller  reporting company.

<PAGE>


ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF
          FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS

Executive Overview
------------------

     The  results of operations for the year ended December 31, 2008 include the
results  of  ICS  which  was acquired effective December 31, 2007.  Although the
Company  recorded  excellent  operating results in its fourth quarter before the
goodwill impairment charge, the Company recorded a decrease in operating results
for  the  year  ended  December  31,  2008.   In  addition, after completing its
impairment testing of goodwill and other intangible assets, the Company recorded
an  impairment  charge  of  $6,889,000  at  December  31,  2008.

Although  sales increased by 5.7%, this increase was principally attributable to
the inclusion ICS in the current period.  Exclusive of ICS, net sales would have
decreased  by  approximately  14.0 % principally due to decreased sales from our
Instrument  Division and Tulip and despite increased sales from our Power Group.
Gross  profit  margins  decreased  slightly for the year ended December 31, 2008
compared  to  the  prior  year.    Due  to  lower gross margins, higher selling,
general  and  administrative expenses and lower investment and other income, net
income  for  the  year  ended  December  31,  2008  decreased to $1,012,000 from
$2,632,000  for  the  prior  year  exclusive  of  the  aforementioned  goodwill
impairment  charge  and  a  $130,000 and $50,000 other than temporary impairment
loss  in  our  corporate  bond  portfolio  for  the current year and prior year,
respectively.  Inclusive  of these one-time charges, net loss for the year ended
December  31,  2008  was  $6,007,000 compared to net income of $2,582,000 in the
prior  year.

Our  backlog  at  December  31,  2008  was approximately $15,800,000 compared to
$14,500,000  at  December  31,  2007.  There  is no seasonality to the Company's
business.  Our  shipping  schedules  are  generally  determined  by the shipping
schedules  outlined in the purchase orders received from our customers.  Both of
our  operating  segments  are  pursuing  a  significant  amount  of  business
opportunities  and  our  confidence level remains high with respect to receiving
many  of  the  orders we are pursuing, although timing is always an uncertainty.

Our  success  of  the  past few years has significantly strengthened our balance
sheet  evidenced  by  our  4.4  to  1  current  ratio  at December 31, 2008.  We
currently  have  a  $3,000,000  credit  facility in place.  As a result of lower
profitability  related  to  customer  shipping  delays  in  the first and second
quarter  of  2008,  the  Company was not in compliance with two of its financial
covenants at September 30, 2008.  In November 2008, the Company's primary lender
waived the covenant default of two of its financial ratios at September 30, 2008
and  the  Company  renegotiated  the financial covenant ratios for the quarterly
reporting  periods  December  31,  2008  and March 31, 2009.  Beginning June 30,
2009,  the  covenants  will  revert  back  to  their  original  ratios  with  a
modification  to  a  certain financial ratio covenant definition.    The Company
was  in  compliance  with  all  of its financial covenants at December 31, 2008.

In  August  2008, the Company's Board of directors authorized a stock repurchase
program  allowing it to purchase up to $3.0 million of its outstanding shares of
common  stock  in  open market or privately negotiated transactions.  During the
period  from  August  2008  through  December  31, 2008, the Company repurchased
approximately  237,000  shares  at  an  average price of $2.24 per share.  Total
consideration for the repurchased stock was approximately $529,000.  From August
through  March  20,  2009, the Company purchased approximately 253,000 shares of
its  common  stock  for  total  cash  consideration  of $564,000 representing an
average  price  of  $2.23  per  share.


Forward  Looking  Statements
----------------------------

     Statements  in  this  Item  7.  "Management's  Discussion  and  Analysis of
Financial  Condition  and  Results of Operations" and elsewhere in this document
are  certain  statements which are not historical or current fact and constitute
"forward-looking  statements"  within the meaning of such term in Section 27A of
the  Securities  Act  of  1933 and Section 21E of the Securities Exchange Act of
1934.  Such  forward-looking  statements  involve  known  and  unknown  risks,
uncertainties  and  other  factors  that  could  cause  the  actual financial or
operating  results of the Company to be materially different from the historical
results  or from any future results expressed or implied by such forward-looking
statements.  Such  forward looking statements are based on our best estimates of
future results, performance or achievements, based on current conditions and the
most  recent results of the Company.  In addition to statements which explicitly
describe  such risks and uncertainties, readers are urged to consider statements
labeled  with  the  terms "may", "will", "potential", "opportunity", "believes",
"belief",  "expects",  "intends",  "estimates",  "anticipates"  or "plans" to be
uncertain  and  forward-looking. The forward-looking statements contained herein
are  also  subject generally to other risks and uncertainties that are described
from  time  to  time  in the Company's reports and registration statements filed
with  the  Securities  and  Exchange  Commission.



CRITICAL ACCOUNTING POLICIES

     The  discussion  and  analysis of the Company's financial condition and the
results  of  its  operations are based on the Company's financial statements and
the  data  used  to  prepare them.  The Company's financial statements have been
prepared  based on accounting principles generally accepted in the United States
of  America.  On  an  on-going basis, we re-evaluate our judgments and estimates
including  those  related to inventory valuation, the valuation allowance on the
Company's  deferred  tax  asset,  goodwill  impairment, valuation of share-based
compensation,  revenue and cost recognition on long-term contracts accounted for
under the percentage-of-completion method and other than temporary impairment on
marketable  securities.  These  estimates  and judgments are based on historical
experience  and  various  other  assumptions  that are believed to be reasonable
under  current business conditions and circumstances.  Actual results may differ
from  these  estimates  under  different assumptions or conditions.  The Company
believes  the  following  critical  accounting  policies affect more significant
judgments  and  estimates  in  the  preparation  of  the  consolidated financial
statements.


Inventories
-----------

     Inventory  is  valued at the lower of cost (specific, average and first-in,
first-out  basis)  or market.  Inventory items are reviewed regularly for excess
and obsolete inventory based on an estimated forecast of product demand.  Demand
for  the Company's products can be forecasted based on current backlog, customer
options  to  reorder  under existing contracts, the need to retrofit older units
and  parts  needed for general repairs.  Although the Company makes every effort
to  insure  the  accuracy  of  its  forecasts  of  future  product  demand,  any
significant  unanticipated changes in demand or technological developments could
have  an impact on the level of obsolete material in its inventory and operating
results  could  be affected, accordingly.  However, world events have forced our
country  into various situations of conflict whereby equipment is used and parts
may  be  needed for repair.  This could lead to increased product demand as well
as  the use of some older inventory items that the Company had previously deemed
to  be  obsolete.

Deferred tax asset
------------------

     At  December 31, 2008, the Company had an alternative minimum tax credit of
approximately  $573,000  with  no  limitation  on  the  carry-forward period and
federal and state net operating loss carry-forwards of approximately $20,000,000
and  $7,000,000,  respectively  that  expire  through  2020.  Approximately,
$16,000,000  of  federal  net  operating  loss  carry-forwards  expire  between
2010-2012.  In  addition,  the  Company  receives  a  tax  deduction  when their
employees  exercise  their  non-qualified  stock  options thereby increasing the
Company's  deferred  tax  asset.  The  Company  records a valuation allowance to
reduce  its deferred tax asset when it is more likely than not that a portion of
the  amount  may not be realized.  The Company estimates its valuation allowance
based  on  an  estimated  forecast of its future profitability.  Any significant
changes  in future profitability resulting from variations in future revenues or
expenses  could  affect  the  valuation  allowance on its deferred tax asset and
operating  results could be affected, accordingly. Due to the Company's decrease
in  profitability  in  2008  and  a  weakening economy that could affect certain
portions of its business, the Company decreased its projection for profitability
for future periods and decreased its estimate of probability that it will attain
those  profit levels; thereby increasing its valuation allowance on its deferred
tax  asset.


Impairment  of  Goodwill
------------------------

     The Company has significant intangible assets related to goodwill and other
acquired  intangibles.  In  determining the recoverability of goodwill and other
intangibles,  assumptions  are  made  regarding  estimated future cash flows and
other  factors  to determine the fair value of the assets.  After completing the
impairment testing of goodwill and other intangible assets pursuant to Statement
of  Financial  Accounting  Standards  No.  142,  "Goodwill  and Other Intangible
Assets" ("SFAS 142"), the Company concluded an impairment charge should be taken
at  December  31, 2008 in connection with the recorded goodwill arising from its
acquisitions  made  between  2005  and  2007.  If  estimates  or  their  related
assumptions used in the current testing change in the future, the Company may be
required  to  record  further impairment charges for those assets not previously
recorded.

Share-Based  Compensation
-------------------------

     Effective  January  1,  2006,  the  Company  began  recognizing share-based
compensation under SFAS No. 123(R), which requires the measurement at fair value
and  recognition  of  compensation  expense  for  all  share-based awards. Total
share-based  compensation  expense  was $250,000 for the year ended December 31,
2008.  The estimated fair value of stock options granted in 2008 were calculated
using the Black-Scholes model. This model requires the use of input assumptions.
These  assumptions include expected volatility, expected life, expected dividend
rate,  and  expected  risk-free  rate  of  return.

Revenue  and  Cost  Recognition
-------------------------------

     Revenue  and  costs  under  larger, long-term contracts are reported on the
percentage-of-completion  method.  For  projects  where  materials  have  been
purchased,  but  have not been placed in production, the costs of such materials
are  excluded  from  costs  incurred  for the purpose of measuring the extent of
progress  toward  completion. The amount of earnings recognized at the financial
statement date is based on an efforts-expended method, which measures the degree
of  completion  on  a  contract  based  on  the amount of labor dollars incurred
compared  to  the total labor dollars expected to complete the contract. When an
ultimate  loss is indicated on a contract, the entire estimated loss is recorded
in  the period. Assets related to these contracts are included in current assets
as they will be liquidated in the normal course of contract completion, although
this  may  require  more  than  one  year.

Other  than  Temporary  Impairment
----------------------------------

     The  Company  currently  has in excess of $1,000,000 invested in government
and  corporate  bonds.  The Company treats its investments as available for sale
pursuant to SFAS No. 115 which requires the Company to assess its portfolio each
reporting  period  to  determine whether declines in fair value below book value
are  considered  to be other than temporary.  If the impairment is determined to
be  other  than  temporary,  the  investment  is  written  down  to cost and the
write-down  is  included  in  earnings  as  a  realized  loss, and a new cost is
established  for  the  security.  Any  subsequent  recovery in fair value is not
recognized  until  the  security  either  is  sold or matures.  The Company uses
several  factors  in  its  determination  of  whether  an  other  than temporary
impairment of one of its securities has occurred including i) the length of time
and  extent  to  which  market  value has been less than cost; ii) the financial
condition  and near term prospects of the issuer; iii) the intent and ability of
the  Company to retain its investment in the issuer to allow for any anticipated
recovery in market value; iv) whether a decline in fair value is attributable to
adverse  conditions  specifically related to the security or specific conditions
in  an  industry and v) whether interest payments continue to be made.  Although
the  Company received all its interest payments during the current year, it took
an  other  than  temporary  impairment write-down of $130,000 for the year ended
December 31, 2008 consisting of bonds held in three separate issuers in which it
determined  the decline in fair value was due to adverse conditions specifically
related  to  the  security  or  specific  conditions  in  an  industry.



RESULTS  OF  OPERATIONS:

Year  Ended  December  31,  2008  vs.  Year  Ended  December  31,  2007
-----------------------------------------------------------------------

     The  Company  currently  operates  in  two  industry  segments.  Its  Orbit
Instrument  Division  and  its  Tulip  subsidiary  are engaged in the design and
manufacture  of  electronic  components  and  subsystems  and its ICS subsidiary
performs  system  integration for Gun Weapons Systems and Fire Control Interface
as  well  as logistics support and documentation (the "Electronics Group").  Its
Behlman  subsidiary is engaged in the design and manufacture of commercial power
units  (the  "Power  Group").  The  results  of  operations  for  the year ended
December  31, 2008 include the operations of ICS for the entire period since the
acquisition  was  completed  effective,  December  31,  2007.

     Consolidated  net  sales  for the year ended December 31, 2008 increased by
5.7% to $27,364,000 from $25,885,000 for the year ended December 31, 2007 due to
the  inclusion  of  ICS in the current period and increased sales from the Power
Group  and  despite lower sales from the Company's Orbit Instrument Division and
Tulip  subsidiary.  Exclusive  of  ICS,  net  sales  would  have  decreased  by
approximately  14%.  Sales  from  the  Electronics  Group increased only by 5.2%
despite  the inclusion of ICS in the current period.  During the current period,
the  Company's Orbit Instrument Division resumed shipments of its Remote Control
Units  (RCU)  that  had  previously  been  placed  on hold while it completed an
enhanced  hardware solution imposed as an additional hardware requirement by its
customer.  These  shipment  delays  had  adversely impacted the first and second
quarters  of  2008.  The  resumption of these deliveries contributed to a strong
fourth  quarter  but  did not make up for the shipment shortfall of the previous
quarters.  The  Orbit Instrument Division also experienced an unrelated customer
delivery  issue  in  the  first  quarter  of  2008  that  resulted in a shipment
shortfall for that period, which was resolved at December 31, 2008. This loss of
sales,  along  with decreased sales from the Company's Tulip subsidiary resulted
in a slight increase in sales for the Electronics Group despite the inclusion of
ICS in the current period.  Sales from the Power Group increased by 9.8% for the
current  year  as  the  segment  recorded a record year of bookings and revenue.

Gross profit, as a percentage of net sales, for the year ended December 31, 2008
decreased  to 42.2% from 43.4% for the prior year. This decrease resulted from a
lower  gross profit from the Company's Electronics Group (38.7% v. 42.9%) due to
a  decrease  in  sales  from  both the Orbit Instrument Division and Tulip.  The
increase  in  gross profit (47.2% v. 44.3%) from the Power Group was principally
due  to  the  increase  in  sales  and  to  product  mix.

     Selling,  general  and  administrative  expenses  increased  by  19.9%  to
$10,469,000  for  the  year ended December 31, 2008 from $8,729,000 for the year
ended  December  31,  2007  principally  due  to the inclusion of ICS's selling,
general  and administrative costs of $1,741,000 in the current period.  Selling,
general  and  administrative  expenses,  as  a percentage of sales, for the year
ended  December  31,  2008  increased  to  38.3%  from  33.7% for the year ended
December  31,  2007 principally due to the aforementioned increase in costs that
was  not  commensurate  with  the  increase  in  sales.

After  completing the impairment testing of goodwill and other intangible assets
pursuant  to  Statement of Financial Accounting Standards No. 142, "Goodwill and
Other  Intangible  Assets"  ("SFAS  142"),  the  Company concluded an impairment
charge of $6,889,000 should be taken at December 31, 2008 in connection with the
recorded  goodwill  arising from its Tulip and ICS acquisitions made in 2005 and
2007,  respectively.

Interest expense for the year ended December 31, 2008 increased to $342,000 from
$332,000  for the year ended December 31, 2007 due to an increase in the amounts
owed  to  lenders  in  the  current year due to the acquisition of ICS effective
December  31,  2007, that was partially offset by a reduction in interest rates.

Investment  and  other  income for the year ended December 31, 2008 decreased to
$154,000  from  $447,000 for the prior year principally due to a decrease in the
amounts  invested  during  the  current year, a decrease in interest rates and a
$130,000 other than temporary impairment loss related to certain corporate bonds
held  by  the  Company.  For the year ended December 31, 2007, the Company had a
$50,000  other  than  temporary  impairment  loss  related to its corporate bond
portfolio.

Loss  before income tax provision was $5,987,000 for the year ended December 31,
2008  compared  to  income  of  $2,612,000 for the year ended December 31, 2007.
This  decrease was principally due to the goodwill impairment charge, a decrease
in  sales  from  both  the  Orbit Instrument Division and Tulip, the decrease in
gross  margins, the increase in selling, general and administrative expense, the
decrease  in  investment  and other income and despite the increase in sales and
profitability  from  the  Power  Group.

Income  taxes for the year ended December 31, 2008 and December 31, 2007 consist
of  $20,000  and  $30,000,  respectively,  in  state income taxes that cannot be
offset  by  any  state  net  operating  loss  carry-forwards.

As  a result of the foregoing, net loss for the year ended December 31, 2008 was
$6,007,000  compared  to  income  of  $2,582,000 for the year ended December 31,
2007.

     Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the year ended December 31, 2008 decreased to $2,070,000 from $3,505,000 for the
year  ended December 31, 2007.  Listed below is the EBITDA reconciliation to net
income:

                                              Year  ended
                                             December  31,
                                             -------------
                                       2008                   2007
                                       ----                   ----

Net  (loss)  income              $(6,007,000)            $2,582,000
Interest  expense                    342,000                332,000
Income  tax  expense                  20,000                 30,000
Goodwill  impairment               6,889,000                    -
Depreciation  and  amortization      826,000                561,000
                                 ------------           ------------
EBITDA                            $2,070,000             $3,505,000
                                  ===========            ==========

     EBITDA  is  a  Non-GAAP financial measure and should not be construed as an
alternative  to net income. An element of the Company's growth strategy has been
through  strategic acquisitions which have been substantially funded through the
issuance  of  debt.  This  has  resulted  in  significant  interest  expense and
amortization  expense. EBITDA is presented as additional information because the
Company  believes  it  is useful to our investors and management as a measure of
cash  generated by our business operations that will be used to service our debt
and  fund  future  acquisitions  as  well  as  provide  an additional element of
operating  performance.

Liquidity,  Capital  Resources  and  Inflation
----------------------------------------------

     Working  capital  decreased to $17,136,000 at December 31, 2008 as compared
to  $18,167,000  at December 31, 2007.  Despite the decrease in working capital,
the  ratio of current assets to current liabilities was 4.4 to 1 at December 31,
2008 compared to 4.1 to 1 at December 31, 2007. The reduction in working capital
was  principally  due  to  the  repayment  of long-term debt and the purchase of
treasury  stock.

Net  cash  used in operating activities for the year ended December 31, 2008 was
$1,210,000,  primarily  attributable  to the net loss for the year, the non cash
deferred  income,  increase in accounts receivable and inventory and decrease in
accrued  expenses, taxes payable and customer advances that was partially offset
by  the  non-cash goodwill impairment charge, amortization of intangible assets,
depreciation  and  stock  based compensation, the decrease in cost and estimated
earnings in excess of billings and amounts due from ICS sellers, and an increase
in  accounts  payable.  Net  cash  provided by operating activities for the year
ended December 31, 2007 was $1,477,000, primarily attributable to net income for
the  period,  the  non-cash  amortization of intangible assets, depreciation and
stock based compensation and the increase in accounts payable that was partially
offset  by the increase in accounts receivable and inventory and the decrease in
customer  advances.

Cash flows provided by investing activities for the year ended December 31, 2008
was  $2,257,000,  attributable  to  the  sale  of marketable securities that was
partially  offset by the purchase of marketable securities and fixed assets, and
costs  associated  with  the  ICS  acquisition.  Cash  flows  used  in investing
activities  for the year ended December 31, 2007 was $3,846,000, attributable to
the  acquisition  of ICS, the purchase of marketable securities and fixed assets
that  was  partially  offset  by  the  sale  of  marketable  securities.

Cash flows used in financing activities for the year ended December 31, 2008 was
$2,543,000,  primarily  attributable  to  the  repayments  of long term debt and
purchase of treasury stock that was partially offset from loan proceeds form the
line  of credit.  Cash flows provided by financing activities for the year ended
December  31,  2007  was  $2,010,000,  attributable  to  loan proceeds primarily
related  to the acquisition of ICS and stock option exercises that was partially
offset  by  repayments  of  debt.

     In  December  2007,  the  Company entered into an amended $3,000,000 credit
facility  with a commercial lender secured by accounts receivable, inventory and
property  and  equipment.  In  April  2005, the Company entered into a five-year
$5,000,000  Term Loan Agreement to finance the acquisition of Tulip ("Tulip Term
Loan")  and  its manufacturing affiliate.  In December 2007, the Company entered
into  a  five-year  $4,500,000 Term Loan Agreement to finance the acquisition of
ICS  ("ICS  Term  Loan").  In  connection with the new Term Loan entered into in
December  2007,  the  interest rates on both Term Loan Agreements and the credit
facility  were  amended  to  equal a certain percentage plus the one month LIBOR
depending  on  a  matrix  related  to  a certain financial covenant.  The credit
facility  will  continue from year to year unless sooner terminated for an event
of default including non-compliance with certain financial covenants.  Principal
payments  under  the  two  term  loan  facilities are approximately $113,000 per
month.

In  April  2005, the Company entered into a five year $2,000,000 Promissory Note
with the selling shareholders of Tulip ("Tulip Shareholder Note") at an interest
rate  of  prime  plus 2.00% (3.25% at December 31, 2008).  Principal payments of
$100,000  were  made  on a quarterly basis along with accrued interest.  In June
2007,  the  Company  refinanced  the  balance  due  on  the  Promissory  Note of
$1,050,000  with  its  primary commercial lender.  Under the terms of a new Term
Loan,  monthly payments of $35,000 will be made over a thirty-month period along
with  accrued  interest  pursuant  to  the  interest  terms  described  below.

As  a  result  of lower profitability related to customer shipping delays in the
first  and second quarter of 2008, the Company was not in compliance with two of
its  financial  covenants  at September 30, 2008.  In November 2008, the Company
entered  into  amended  loan  agreements,  whereby  the Company's primary lender
waived the covenant default of two of its financial ratios at September 30, 2008
and  the  Company  renegotiated  the financial covenant ratios for the quarterly
reporting  periods  December  31,  2008  and March 31, 2009.  Beginning June 30,
2009,  the  covenants  will  revert  back  to  their  original  ratios  with  a
modification  to  a  certain  financial  ratio  covenant definition.  The lender
instituted  an  unused  line fee of .25% per annum, as a cost to the Company for
the  waiver  and amendment to the loan agreements.  In connection therewith, the
interest  rate  on  the Tulip Term Loan and Tulip Shareholder Note, increased to
the  sum of 2.50% plus the one month LIBOR and the interest rate on the ICS Term
Loan  and  line  of  credit was increased to the sum of 2.25% plus the one month
LIBOR.  At  December  31,  2008,  the  one  month LIBOR was equal to 0.44%.  The
Company was in compliance with all its financial covenants at December 31, 2008.

        The  Company's contractual obligations and commitments are summarized as
follows:
<TABLE>
<CAPTION>

<S>                      <C>          <C>             <C>            <C>          <C>
                                      Less than       1-3            4-5          After 5
Obligation               Total        1 Year          Years          Years        Years
----------               ------       -----           -----          -----        --------

Long-term debt       $ 6,806,000     $1,777,000     $3,690,000      $1,339,000        -

Note payable             399,000        399,000           -              -            -

Employment
  contracts            4,253,000      2,162,000      2,091,000            -           -

Operating leases       3,157,000        789,000      2,092,000         276,000        -
                       ---------      ---------      ---------      ----------    --------

Total contractual
    obligations      $14,615,000     $5,127,000     $7,873,000      $1,615,000        -
                    ============     ==========     ==========      ==========       ===
</TABLE>

     The  Company's  existing  capital  resources,  including  its  bank  credit
facilities  and  its  cash  flow  from operations are expected to be adequate to
cover  the  Company's cash requirements for its operations. The Company believes
that  financing alternatives are available in order to fund future acquisitions.

In  August  2008, the Company's Board of directors authorized a stock repurchase
program  allowing it to purchase up to $3.0 million of its outstanding shares of
common  stock  in  open market or privately negotiated transactions.  During the
period  from  August  2008  through  December  31, 2008, the Company repurchased
approximately  237,000  shares  at  an  average price of $2.24 per share.  Total
consideration for the repurchased stock was approximately $530,000.  From August
2008  through March 20, 2009, the Company purchased approximately 253,000 shares
of  its  common  stock  for total cash consideration of $564,000 representing an
average  price  of  $2.23  per  share.

     Inflation  has  not  materially  impacted  the  operations  of the Company.

Certain  Material  Trends
-------------------------

     During  the  second  quarter,  the  Company's Orbit Instrument Division was
verbally  advised  by  one of its customers to provide support for the immediate
development  of  certain modifications to a product for the Division.  This "out
of  scope" support caused a delay in a significant amount of shipments scheduled
throughout  2008  which  resulted in a decrease in revenue and profitability for
2008.  The  Division worked closely with this customer and shipment of the units
resumed  in the third quarter.  However, a significant number of units scheduled
for  shipment by December 31, 2008 will not be shipped until 2009. This includes
certain purchase orders for this product that were expected in the third quarter
but  were  not   received  until  the  end  of the year.  In addition, the Orbit
Instrument Division also experienced an unrelated customer delivery issue in the
first  quarter  of  the current period that resulted in a shipment shortfall for
that  period  which was resolved by year end.  These shipment delays, along with
reduced  revenue  from the Company's Tulip subsidiary have had an adverse effect
on  the  Company's  Electronics  Group.  Shipment  delays related to engineering
issues  are  commonplace in our industry and may, in the future, have an adverse
effect  on  the  financial  performance  of  the  Company.

     The  Power Group had a record year of bookings and revenue.  The commercial
division  of the Power Group has historically been vulnerable to a weak economy.
However,  bookings  in  the commercial division are being sustained and bookings
from the custom division remain fairly strong.  However, due to current economic
conditions  and  the  possible  effect on capital spending, it is uncertain that
this  trend  will  continue  into  2009.

     In  April  2005,  the  Company  completed  the acquisition of Tulip and its
operations  became  part  of the Company's Electronics Group.  In December 2007,
the  Company  completed  the  acquisition  of  ICS which also became part of the
Electronics  Group.  The  Company's Electronics Group and the Custom Division of
its  Power  Group  are  heavily  dependent  on military spending.  The events of
September  11,  2001,  have  put  a  tremendous emphasis on defense and homeland
security  spending  and  the  Company  has  benefited from an increasing defense
budget.   Although  the  Electronics  Group and the Custom Division of the Power
Group  are  pursuing several opportunities for reorders, as well as new contract
awards,  the  Company  has  normally found it difficult to predict the timing of
such  awards.  In  addition,  the  Company  has  an  unprecedented amount of new
opportunities  that  are  in  the  prototype  or  pre-production  stage.  These
opportunities  generally  move  to  a  production  stage at a later date but the
timing  of  such  is  also  uncertain.

There  is  no  seasonality to the Company's business. The Company's revenues are
generally  determined  by the shipping schedules outlined in the purchase orders
received  from its customers. The Company stratifies all the opportunities it is
pursuing  by  various  confidence  levels. The Company generally realizes a very
high success rate with those opportunities to which it applies a high confidence
level.  The  Company  currently  has  a significant amount of potential contract
awards  to  which it has applied a high confidence level. However, because it is
difficult  to  predict  the  timing  of awards for most of the opportunities the
Company  is  pursuing,  it  is  also  difficult to predict when the Company will
commence  shipping under these contracts. A delay in the receipt of any contract
from  its  customer  ultimately  causes a corresponding delay in shipments under
that contract. During 2007 and in 2008, due to shipping schedules, the Company's
second  half  of  the  year  was  stronger  than  the  first  half.

     Despite  the  increase  in  military  spending,  the  Company still faces a
challenging  environment.  The  government is emphasizing the engineering of new
and  improved weaponry and it continues to be our challenge to work with each of
our  prime  contractors  so  that  we can participate on these new programs.  In
addition,  these  new  contracts require incurring up-front design, engineering,
prototype  and  pre-production  costs.  While  the Company attempts to negotiate
contract  awards for reimbursement of product development, there is no assurance
that  sufficient monies will be set aside by its customers, including the United
States  Government,  for  such  effort.  In  addition, even if the United States
Government  agrees  to reimburse development costs, there is still a significant
risk  of  cost  overrun  that  may  not  be reimbursable.  Furthermore, once the
Company has completed the design and pre-production stage, there is no assurance
that funding will be provided for future production.  In such event, even if the
Company is reimbursed its development costs it will not generate any significant
profits.

     The  Company  is  heavily  dependent  upon military spending as a source of
revenues  and  income.  However,  even  increased  military  spending  does  not
necessarily  guarantee  the  Company  increased revenues, particularly, when the
allocation  of  budget  dollars  may  vary  depending  on what may be needed for
specific  military  conflicts   Any  future  reductions in the level of military
spending  by  the  United States Government due to budget constraints or for any
other  reason, could have a negative impact on the Company's future revenues and
earnings.  In  addition, due to major consolidations in the defense industry, it
has  become  more difficult to avoid dependence on certain customers for revenue
and  income.  Behlman's  line  of  commercial  products  gives  the Company some
diversity and the additions of Tulip and ICS give the Electronics Segment a more
diversified  customer  base.

     The  Company's  business  strategy  is  to  expand  its  operations through
strategic,  accretive acquisitions.  Through the past several years, the Company
reviewed  various  potential  acquisitions  and  believes  there  are  numerous
opportunities  presently available.  In April 2005, it completed the acquisition
of Tulip and in December 2007, it completed the acquisition of ICS.     However,
due  to  current economic conditions and tightening of credit markets, there can
be no assurance that the Company will obtain the necessary financing to complete
additional  acquisitions  and even if it does, there can be no assurance that we
will  have  sufficient  income  from  operations  of  such acquired companies to
satisfy  the  interest  payments, in which case, we will be required to pay them
out  of  Orbit's  operations  which  may  be  adversely  affected.  The  Company
continues  to  review  acquisition  candidates but there is no assurance that an
acquisition  will  be  completed  in  2009.

     During  the  second quarter of 2007, the Company expanded the activities of
its  investment  banker  to  include  the  pursuit  of  alternative  strategies,
including  the potential sale of the Company as a means of enhancing shareholder
value.  In June 2008, the Company terminated such activities with the investment
banker  but  continues  to  pursue strategic alternatives to enhance shareholder
value.  However, there is no assurance that a sale or any of the other strategic
alternatives  will  be  accomplished.

ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     As  of December 31, 2008, the Company had amounts due to its primary lender
under three separate term loans totaling approximately $6,806,000.  Interests on
these  term  loans  are  equal  to  the  sum  of  either 2.25% or 2.50% plus the
one-month  LIBOR.  In addition, the Company has a $3,000,000 line of credit with
the  same  lender  at a rate equal to the sum of 2.25% plus the one-month LIBOR.
The Company had approximately $399,000 in borrowings under the line of credit at
December  31,  2008.  During  2008,  LIBOR  averaged approximately 2.70% and was
0.44%  at  December  31,  2008.

LIBOR  is  based  on rates that contributor banks in London offer each other for
inter-bank  deposits.  We  are  subject  to  changes in LIBOR that are generally
determined  by  general  market  and  economic  fluctuations.  Any  hypothetical
increase  of  1%  in  interest rates will result in an increase of approximately
$68,000  of  annual  interest  expense exclusive of the impact of any borrowings
under  the  Company's  line  of  credit.

None  of  the Company's variable rate of interest arrangements are hedged by any
derivative  instruments.  The  Company  believes that any moderate interest rate
increases  will  not  have  any  material  adverse  effect  on  its  results  of
operations,  liquidity  or  financial  position.

The  Company  believes  that  it is not subject in any material way to any other
forms  of  market  risk.

ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The information required under this Item appears in Item 15 of this report.


ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

     None.

ITEM  9A(T).     CONTROLS  AND  PROCEDURES

     DISCLOSURE  CONTROLS  AND  PROCEDURES

     The  Company's  management, including the Company's Chief Executive Officer
and  Chief  Financial  Officer, evaluated the effectiveness of the design of the
Company's  disclosure  controls and procedures, as defined in Rules 13a-15(e) or
15d-15(e)  under the Securities Exchange Act of 1934 as of the end of the period
covered  by  this report.  Based on that evaluation, the Chief Executive Officer
and the Chief Financial Officer concluded that the Company's disclosure controls
and  procedures  are  effective.

     There have been no changes in our internal control over financial reporting
during  the three months ended December 31, 2008, that have materially affected,
or  are  reasonably  likely  to  materially  affect,  our  internal control over
financial  reporting.


     MANAGEMENT'S  REPORT  ON  INTERNAL  CONTROL  OVER  FINANCIAL  REPORTING

     The  Company's  management  is responsible for establishing and maintaining
adequate  internal  control  over  financial reporting as defined in Rules 13a -
15(f)  of  the  Securities  Exchange  Act  of  1934.

     The  Company's  management  conducted an evaluation of the effectiveness of
its internal control over financial reporting, as of December 31, 2008, based on
the  framework  and  criteria  established  in  Internal  Control  -  Integrated
Framework,  issued  by the Committee of Sponsoring Organizations of the Treadway
Commission.  This  evaluation  included review of the documentation of controls,
evaluation  of  the  design  effectiveness of controls, testing of the operating
effectiveness  of  controls  and  a conclusion on this evaluation. Based on this
evaluation,  management  concluded  that  the  Company's  internal  control over
financial  reporting  was  effective  as  of  December  31,  2008.

     This  annual report does not include an attestation report of the Company's
independent  registered  public  accounting firm regarding internal control over
financial  reporting.  Management's report was not subject to attestation by the
Company's  independent  registered  public accounting firm pursuant to temporary
rules  of  the  Securities  and  Exchange  Commission that permit the Company to
provide  only  management's  report  in  this  annual  report.

     We  believe  that  a  controls  system,  no  matter  how  well designed and
operated, can not provide absolute assurance that the objectives of the controls
system  are  met,  and  no evaluation of controls can provide absolute assurance
that  all  control  issues and instances of fraud, if any, within a company have
been  detected.

ITEM  9B.     OTHER  INFORMATION

     There  have  not  been  any other material changes in the Company's affairs
which  have not been described in a report on Form 8-K during the fourth quarter
ended  December  31,  2008.


          PART  III
          ---------

ITEM  10.     DIRECTORS,  EXECUTIVE  OFFICERS,  AND  CORPORATE     GOVERNANCE.

     Incorporated by reference to the Company's definitive proxy statement to be
filed  pursuant  to Regulation 14A promulgated under the Securities Exchange Act
of  1934  in  connection with the Company's 2009 Annual Meeting of Stockholders.

ITEM  11.     EXECUTIVE  COMPENSATION

     Incorporated by reference to the Company's definitive proxy statement to be
filed  pursuant  to Regulation 14A promulgated under the Securities Exchange Act
of  1934  in  connection with the Company's 2009 Annual Meeting of Stockholders.

ITEM  12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED  STOCKHOLDER  MATTERS

     Incorporated by reference to the Company's definitive proxy statement to be
filed  pursuant  to Regulation 14A promulgated under the Securities Exchange Act
of  1934  in  connection with the Company's 2009 Annual Meeting of Stockholders.

ITEM  13.     CERTAIN  RELATIONSHIPS,  AND  RELATED  TRANSACTIONS  AND
DIRECTOR  INDEPENDENCE

     Incorporated by reference to the Company's definitive proxy statement to be
filed  pursuant  to Regulation 14A promulgated under the Securities Exchange Act
of  1934  in  connection with the Company's 2009 Annual Meeting of Stockholders.

ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES

          Incorporated  by reference to the Company's definitive proxy statement
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act  of  1934  in  connection  with  the  Company's  2009  Annual  Meeting  of
Shareholders.

ITEM  15.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES

     (a) The following documents are filed as part of this Annual Report on Form
10-K  for  the  fiscal  year  ended  December  31,  2008.

1.     Financial  Statements

2.     Schedules-

               None.

3.     Exhibits:

Exhibit  No.     Description  of  Exhibit
------------     ------------------------

2.1  Stock  Purchase  Agreement,  dated  December  13,  2004, by and among Orbit
International  Corp.,  Tulip Development Laboratory, TDL Manufacturing, Inc. and
the  respective  Shareholders  of  Tulip  Development  Laboratory,  Inc. and TDL
Manufacturing,  Inc.  Incorporated  by  reference to Exhibit 2.1 to Registrant's
Current  Report  on  Form  8-K  for  December  13,  2004.

2.2     Stock  Purchase  Agreement,  dated December 19, 2007, by and among Orbit
International  Corp.,  Integrated  Consulting  Services, Inc. and the respective
shareholders  of  Integrated Consulting Services, Inc. Incorporated by reference
to Exhibit 2.1 to Registrant's Current Report on Form 8-K for December 19, 2007.

3.1     Certification  of  Incorporation, as amended.  Incorporated by reference
to  Exhibit  3(a) to Registrant's Annual Report on Form 10-K for the fiscal year
ended  June  30,  1991.

3.2     By-Laws,  as  amended.  Incorporated  by  reference  to  Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1988.

4.1     Orbit  International  Corp.  2003 Stock Incentive Plan.  Incorporated by
reference to Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December  31,  2002.

10.1     New  Employment  Agreement,  dated  as  of  December  14, 2007, between
Registrant  and  Mitchell  Binder.  Incorporated  by  reference  to Registrant's
Current  Report  on  Form  8-K  for  December  11,  2007.

10.2     New  Employment  Agreement,  dated  as  of  December  14, 2007, between
Registrant  and  Bruce  Reissman.  Incorporated  by  reference  to  Registrant's
Current  Report  on  Form  8-K  for  December  11,  2007.

10.3     New  Employment  Agreement,  dated  as  of  December  14, 2007, between
Registrant  and  Dennis  Sunshine.  Incorporated  by  reference  to Registrant's
Current  Report  on  Form  8-K  for  December  11,  2007.

10.4     Form  of  Indemnification Agreement between the Company and each of its
Directors  dated  as of September 10, 2001. Incorporated by reference to Exhibit
10(d)  to  Registrant's Annual Report on Form 10-KSB for the year ended December
31,  2001.

10.5     Purchase and Sale Agreement between the Company and 80 Cabot Realty LLC
dated  February  26,  2001.  Incorporated  by  reference  to  Exhibit  4(b)  to
Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2000.

10.6     Lease  Agreement  between  the  Company  and  80 Cabot Realty LLC dated
February  26,  2001.  Incorporated  by reference to Exhibit 4(b) to Registrant's
Annual  Report  on  Form  10-KSB  for  the  fiscal year ended December 31, 2000.

10.7     Term Loan and Security Agreement dated as of December 19, 2007, between
Orbit  International  Corp.  and  Merrill Lynch Business Financial Services Inc.
("MLBFS").  Incorporated  by  reference  to Exhibit 10.6 to Registrant's Current
Report  on  Form  8-K  for  December  19,  2007.

10.8     Net  lease  dated  as  of  April  4,  2005  by  and  between  Rudy's
Thermo-Nuclear  Devices,  as  Landlord,  and  TDL  Manufacturing, Inc. and Tulip
Development  Laboratory, Inc.  Incorporated by reference to Registrant's Current
Report  on  Form  8-K  for  April  4,  2005.

10.9     Term  Loan and Security Agreement dated as of April 4, 2005 between the
Company  and  Merrill  Lynch  Financial  Business Services Inc.  Incorporated by
reference  to  Registrant's  Current  Report  on  Form  8-K  for  April 4, 2005.

10.10     Collateral  Installment  Note  to  Merrill  Lynch  Financial  Business
Services  Inc.  dated  as  of  April 4, 2005, from the Company.  Incorporated by
reference  to  Registrant's  Current  Report  on  Form  8-K  for  April 4, 2005.

10.11     Employment  Agreement,  dated  December  19,  2007, between Integrated
Consulting  Services,  Inc.  and  Kenneth  J.  Ice. Incorporated by reference to
Registrant's  Current  Report  on  Form  8-K  for  December  19,  2007.

10.12     Employment  Agreement,  dated  December  19,  2007, between Integrated
Consulting  Services,  Inc.  and  Michael R. Rhudy. Incorporated by reference to
Registrant's  Current  Report  on  Form  8-K  for  December  19,  2007.

10.13     Employment  Agreement,  dated  December  19,  2007, between Integrated
Consulting  Services,  Inc. and Julie A. McDearman. Incorporated by reference to
Registrant's  Current  Report  on  Form  8-K  for  December  19,  2007.

10.14     Custody, Pledge and Security Agreement, dated as of December 19, 2007,
by  and  among Orbit International Corp. ("Pledgor"), Kenneth J. Ice, Michael R.
Rhudy and Julie A. McDearman ("Pledgees"), and Phillips Nizer LLP ("Custodian").
Incorporated  by  reference  to  Registrant's  Current  Report  on  Form 8-K for
December  19,  2007.

10.15     Form  of Contingent Promissory Note (three substantially similar notes
were  issued)  from Orbit International Corp. to Kenneth J. Ice. Incorporated by
reference  to  Registrant's  Current  Report  on Form 8-K for December 19, 2007.

10.16     Form  of  Code  of  Ethics between the Company and its Chief Executive
Officer,  Chief Financial Officer and Chief Accounting Officer.  Incorporated by
reference to Registrant's Annual Report on Form 10K-SB for the fiscal year ended
December  31,  2003.

21.1*     Subsidiaries  of  Registrant.

23.1*     Consent  of  McGladrey  &  Pullen,  LLP.

31.1*     Certification  of  the  Chief  Executive  Officer  required  by  Rule
13a-14(a)  or  Rule  15d-14(a)  and  18  U.S.C.  1350.

31.2*     Certification  of  the  Chief  Financial  Officer  required  by  Rule
13a-14(a)  or  Rule  15d-14(a)  and  18  U.S.C.  1350.

32.1*     Certification  of  the  Chief  Executive  Officer  required  by  Rule
13a-14(b)  or  Rule  15d-14(b)  and  18  U.S.C.  1350.

32.2*     Certification  of  the  Chief  Financial  Officer  required  by  Rule
13a-14(b)  or  Rule  15d-14(b)  and  18  U.S.C.  1350.
_________
     *  Filed  herewith.

<PAGE>


ORBIT INTERNATIONAL CORP.
 AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008

                                      ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                      ------------------------------------------

<TABLE>
<CAPTION>

<S>                                                                                   <C>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                               F-1

CONSOLIDATED FINANCIAL STATEMENTS:

   Balance Sheets as of December 31, 2008 and 2007                                    F-2
   Statements of Operations for the Years Ended December 31, 2008 and 2007            F-3
   Statements of Stockholders' Equity for the Years Ended December 31, 2008 and 2007  F-4
   Statements of Cash Flows for the Years Ended December 31, 2008 and 2007            F-5 - F-6
   Notes to Consolidated Financial Statements                                         F-7 - F-22
</TABLE>



<PAGE>
------


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To  the  Board  of  Directors  and  Stockholders
Orbit  International  Corp.


We  have  audited  the  accompanying  consolidated  balance  sheets  of  Orbit
International  Corp.  and Subsidiaries as of December 31, 2008 and 2007, and the
related  consolidated  statements  of operations, stockholders' equity, and cash
flows  for  the  years  then  ended.  These  financial  statements  are  the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audits.

We  conducted  our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in all material respects, the financial position of Orbit International
Corp.  and  Subsidiaries  as  of  December 31, 2008 and 2007, and the results of
their  operations  and  their  cash flows for the years then ended in conformity
with  U.S.  generally  accepted  accounting  principles.

We  were  not engaged to examine management's assessment of the effectiveness of
Orbit  International  Corp.  and  Subsidiaries'  internal control over financial
reporting  as  of  December  31,  2008 included in the accompanying Management's
Report  on Internal Control Over Financial Reporting and, accordingly, we do not
express  an  opinion  thereon.

/S/  MCGLADREY  &  PULLEN,  LLP
New  York,  New  York

March  31,  2009

<TABLE>
<CAPTION>
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET


<S>                                                                        <C>                                  <C>
DECEMBER 31,                                                                     2008                          2007
------------                                                                 --------                       ---------
Current Assets:
  Cash and cash equivalents                                              $    2,080,000                     $ 3,576,000
  Investments in marketable securities                                        1,127,000                       3,997,000
  Accounts receivable, less allowance for doubtful accounts of $145,000       6,333,000                       4,561,000
  Inventories                                                                11,536,000                      10,453,000
  Costs and estimated earnings
   in excess of billings on uncompleted contracts                                 -                             136,000
  Deferred tax asset                                                            850,000                       1,025,000
  Other current assets                                                          198,000                         331,000
                                                                            ------------                    -----------
TOTAL CURRENT ASSETS                                                         22,124,000                      24,079,000

Property and equipment, net                                                     655,000                         691,000
Intangible assets, net                                                        2,346,000                       2,969,000
Goodwill                                                                      2,909,000                       9,634,000
Deferred tax asset                                                            1,322,000                       1,678,000
Other assets                                                                    644,000                         634,000
                                                                             ----------                    -------------
TOTAL ASSETS                                                                $30,000,000                    $ 39,685,000
                                                                           =============                  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Current portion of long-term obligations                              $     1,777,000                     $ 1,777,000
  Notes payable - bank                                                          399,000                         699,000
  Accounts payable                                                            1,499,000                       1,384,000
  Income taxes payable                                                            6,000                         162,000
  Accrued expenses                                                            1,185,000                       1,395,000
  Customer advances                                                              37,000                         163,000
  Deferred income                                                                85,000                         332,000
                                                                          -------------                    -------------
TOTAL CURRENT LIABILITIES                                                     4,988,000                       5,912,000

Deferred income                                                                 257,000                         342,000
Deferred tax liability                                                            -                             595,000
Long-term obligations, net of current maturities                              5,029,000                       6,753,000
                                                                           ------------                     ------------
TOTAL LIABILITIES                                                            10,274,000                      13,602,000


Stockholders' Equity:
Common stock, $.10 par value, 10,000,000 shares authorized,
 4,772,000 and 4,724,000 shares issued at 2008 and 2007, respectively,
 and 4,535,000 and 4,724,000 shares outstanding at 2008 and 2007,
 respectively                                                                    477,000                         472,000
Additional paid-in capital                                                    21,032,000                      20,766,000
Treasury stock, at cost                                                         (529,000)                           -
Accumulated other comprehensive loss, net of income tax                         (125,000)                        (33,000)
Retained earnings (accumulated deficit)                                       (1,129,000)                      4,878,000
                                                                            -------------                    -----------
STOCKHOLDERS' EQUITY                                                          19,726,000                      26,083,000
                                                                            ------------                     ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $ 30,000,000                     $39,685,000
                                                                           =============                    =============
</TABLE>

                                  See Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>

ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS

<S>                                                                              <C>                                     <C>
YEAR ENDED DECEMBER 31,                                                             2008                                2007
----------------------                                                         ----------                           ---------
Net sales                                                                    $ 27,364,000                         $25,885,000

Cost of sales                                                                  15,805,000                          14,659,000
                                                                             ------------                          ----------
Gross profit                                                                   11,559,000                          11,226,000
                                                                             ------------                          -----------
Selling, general and administrative expenses                                   10,469,000                           8,729,000

Goodwill impairment                                                             6,889,000                                -

Interest expense                                                                  342,000                             332,000

Investment and other income, net                                                 (154,000)                           (447,000)
                                                                              ------------                        ------------
Total expenses, net                                                            17,546,000                           8,614,000
                                                                              -----------                          -----------

(Loss) income before income tax provision                                      (5,987,000)                          2,612,000

Income tax provision                                                               20,000                              30,000
                                                                            --------------                        ------------
Net (loss) income                                                           $  (6,007,000)                        $ 2,582,000
                                                                            ==============                        ============

Net (loss) income per common share:

    Basic                                                                          $(1.33)                                $.59
                                                                                   =======                               =====
    Diluted                                                                        $(1.33)                                $.55
                                                                                   =======                               =====
</TABLE>

<TABLE>
<CAPTION>

                                  See Notes to Consolidated Financial Statements


<S>                                      <C>                                             <C>           <C>
ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 2008 AND 2007
                                      COMMON STOCK                                                            OTHER
                                     10,000,000 SHARES                                                        COMPREHENSIVE
                                        AUTHORIZED          ADDITIONAL   RETAINED EARNINGS                    INCOME(LOSS),
                                  SHARES                    PAID-IN       (ACCUMULATED    TREASURY STOCK      NET OF
                                  ISSUED         AMOUNT     CAPITAL         DEFICIT)      SHARES   AMOUNT     INCOME TAX       TOTAL
                                  ---------     --------    ---------     -----------     ------    -----     -----------   --------

Balance at December 31, 2006      4,588,000   $ 459,000    $19,536,000     $2,296,000       -         -         $5,000  $22,296,000

Share-based compensation expense      -           -            180,000         -            -         -           -         180,000

Issuance of common stock for
 ICS acquisition                    120,000      12,000        983,000          -           -         -            -        995,000

Exercise of options                  16,000       1,000         28,000          -           -         -            -         29,000

Tax benefit of stock option exercise    -             -         39,000          -           -         -            -         39,000

Other comprehensive loss, net of
 income tax                             -             -             -           -           -         -        (38,000)     (38,000)

Net income                              -             -             -       2,582,000       -         -           -       2,582,000
                                    -------     --------    -----------    ----------     ------    ------     --------   ----------
Balance at December 31, 2007      4,724,000     472,000     20,766,000      4,878,000       -         -        (33,000)  26,083,000

Share-based compensation expense        -           -          250,000          -           -         -            -        250,000

Issuance of restricted stock         40,000       4,000         (4,000)         -           -         -            -             -

Exercise of options                   8,000       1,000          9,000          -           -         -            -         10,000

Tax benefit of stock option exercise    -          -            11,000         -           -         -             -         11,000

Other comprehensive loss, net of
 income tax                             -          -               -            -          -          -        (92,000)     (92,000)

Purchase of treasury stock               -         -               -            -       237,000  $(529,000)       -        (529,000)

Net (loss)                               -         -               -       (6,007,000)     -           -          -      (6,007,000)
                                  ---------    -------     ----------     -----------   --------   -------- ----------  -----------
Balance at December 31, 2008      4,772,000   $ 477,000    $21,032,000    $(1,129,000)  237,000  $(529,000)  $(125,000) $19,726,000
                                  =========   =========    ===========    ===========   =======   ========    ========  ===========


</TABLE>


                                  See Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>

ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------

<S>                                                                                              <C>              <C>
YEAR ENDED DECEMBER 31,                                                                         2008               2007
-------------------------------------------------                                           ----------       ------------
Cash flows from operating activities:

  Net (loss) income                                                            $           (6,007,000)       $ 2,582,000

  Adjustments to reconcile net (loss) income to net cash (used in) provided
     by operating activities:
    Goodwill impairment                                                                     6,889,000             -
    Share-based compensation expense                                                          250,000            180,000
    Amortization of intangible assets                                                         623,000            435,000
    Depreciation and amortization                                                             203,000            126,000
    Bond premium amortization                                                                  15,000             14,000
    Loss on disposal of fixed assets                                                           23,000              -
    Bad debts                                                                                     -                6,000
    Unrealized loss on write down of marketable securities                                    130,000             50,000
    Loss (gain) on sale of marketable securities                                               11,000            (15,000)
    Deferred income                                                                          (332,000)           (85,000)
    Changes in operating assets and liabilities:
      Increase in accounts receivable                                                      (1,772,000)          (276,000)
      Increase in inventories                                                              (1,083,000)        (1,109,000)
      Decrease in costs and earnings in excess of billings                                    136,000                -
      Decrease (increase) in other current assets                                              91,000             (7,000)
      Increase in other assets                                                                (10,000)           (57,000)
      Increase in accounts payable                                                            115,000            260,000
      Decrease in customer advances                                                          (126,000)          (634,000)
      Decrease in taxes payable                                                              (156,000)            (6,000)
     (Decrease) increase in accrued expenses                                                 (210,000)            13,000
                                                                                           ----------         ----------
      NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                  (1,210,000)         1,477,000



Cash flows from investing activities:
    Purchase of marketable securities                                                       (1,029,000)       (1,269,000)
    Sale of marketable securities                                                            3,598,000         1,226,000
    Purchase of property and equipment                                                        (190,000)         (143,000)
    Cash paid for acquisition of ICS                                                          (122,000)       (3,660,000)
                                                                                          ------------       -----------
      NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                    2,257,000        (3,846,000)



Cash flows from financing activities:
  Purchase of treasury stock                                                                  (529,000)            -
  Repayments of long-term debt and note payable-bank                                        (3,943,000)       (4,268,000)
  Proceeds from issuance of long-term debt and note payable-bank                             1,919,000         6,249,000
  Proceeds from exercise of stock options                                                       10,000            29,000
                                                                                          -------------       -----------
       NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                  (2,543,000)        2,010,000

(continued)

                                  See Notes to Consolidated Financial Statements

<PAGE>

ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(CONTINUED)
------------

Net decrease in cash and cash equivalents                                                    (1,496,000)         (359,000)

Cash and cash equivalents at beginning of year                                                3,576,000         3,935,000
                                                                                         --------------       ------------
Cash and cash equivalents at end of year                                                $     2,080,000       $ 3,576,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

  Cash paid during the year for interest                                                $       349,000          $358,000

  Cash paid during the year for income taxes                                            $       176,000          $ 36,000



SUPPLEMENTAL  SCHEDULE  OF  NONCASH  INVESTING  AND  FINANCING  ACTIVITIES:

In  December  2007,  the  Company  purchased all of the capital stock of ICS for
$6,700,000. In conjunction with the acquisition, net assets with a fair value of
$857,000  were  acquired.

In  connection with the aforementioned acquisition, approximately 120,000 shares
of  Orbit,  $.10  par value common stock, valued at approximately $1,000,000 was
issued  to  the  former  shareholders  of  ICS.


</TABLE>
                                  See Notes to Consolidated Financial Statements



                                      ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      ------------------------------------------



1.   ORGANIZATION  AND  BUSINESS:
---------------------------------

The  consolidated  financial  statements  include  the  accounts  of  Orbit
International  Corp.  and  its  wholly  owned  subsidiaries  (collectively,  the
"Company").  All  significant  intercompany transactions have been eliminated in
consolidation.

The  Company  currently operates in two industry segments, the Electronics Group
and  the  Power Group. The Electronics Group is comprised of the Company's Orbit
Instrument  Division  ("Orbit"),  its Tulip subsidiary ("Tulip"), and Integrated
Consulting  Services,  Inc.  d/b/a  Integrated Combat Systems ("ICS"). Orbit and
Tulip  are  engaged  in  the design and manufacture of electronic components and
subsystems.  ICS  performs  system  integration for gun weapons systems and fire
control  interface  as  well  as  logistics support and documentation. The Power
Group  is  comprised  of  the Company's Behlman subsidiary and is engaged in the
design  and  manufacture  of  commercial  and  custom  power  units.

2.  SUMMARY  OF  SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------------

     The  preparation  of  consolidated  financial statements in conformity with
accounting  principles  generally  accepted  in  the  United  States  of America
requires  management  to  make  estimates  and  assumptions  that  affect  the
consolidated  financial statements and accompanying notes.  Actual results could
differ  from  those  estimates.

     The  Company  considers  all  highly  liquid investments with a maturity of
three  months  or  less  when  purchased  to  be  cash  equivalents.

     The  Company  maintains  cash  in  bank  deposit accounts, which, at times,
exceed  federally insured limits.  The Company has not experienced any losses on
these  accounts.

The  Company's  investments  are classified as available-for-sale securities and
are  stated  at  fair  value, based on quoted market prices, with the unrealized
gains  and  losses,  net  of income tax, reported in other comprehensive income.
Realized  gains  and  losses  and  declines  in  value  judged  to  be
other-than-temporary on available-for-sale securities are included in investment
income.  The  cost  of  securities  sold is based on the specific-identification
method.  Interest  and  dividends  on such securities are included in investment
income.

     Accounts  receivable  are  reported  at  their outstanding unpaid principal
balances  reduced  by an allowance for doubtful accounts.  The Company estimates
doubtful  accounts  based  on  historical bad debts, factors related to specific
customers'  ability  to pay and current economic trends.  The Company writes off
accounts  receivable  against  the  allowance when a balance is determined to be
uncollectible.

     Inventories  are  priced  at  the  lower  of  cost  (specific,  average and
first-in,  first-out  basis)  or  market.

     Property  and equipment is recorded at cost.  Depreciation and amortization
of  the respective assets are computed using the straight-line method over their
estimated  useful  lives ranging from 3 to 10 years.  Leasehold improvements are
amortized using the straight-line method over the remaining term of the lease or
the  estimated  useful  life  of  the  improvement,  whichever  is  less.

When  impairment  indicators are present, the Company reviews the carrying value
of  its  long-lived  assets  in determining the ultimate recoverability of their
unamortized  values  using  future  undiscounted  cash  flow  analyses.


     The  Company  recognizes  deferred  tax assets and liabilities based on the
expected  future  tax  consequences  of  events  that  have been included in the
financial  statement  or tax returns. Under this method, deferred tax assets and
liabilities  are  determined  based  on  the  difference  between  the financial
statement  and  tax  bases  of assets and liabilities using enacted tax rates in
effect  for the year in which the differences are expected to reverse. Valuation
allowances  have  been  established  to reduce deferred tax assets to the amount
expected  to  be  realized.

     The  Company  recognizes a substantial portion of its revenue upon delivery
of  product,  however,  revenue  and costs under larger, long-term contracts are
reported  on  the  percentage-of-completion method. For projects where materials
have  been purchased but have not been placed into production, the costs of such
materials  are  excluded  from  costs  incurred for the purpose of measuring the
extent  of  progress toward completion. The amount of earnings recognized at the
financial  statement date is based on an efforts-expended method, which measures
the  degree  of  completion  on  a contract based on the amount of labor dollars
incurred  compared to the total labor dollars expected to complete the contract.
When  an  ultimate loss is indicated on a contract, the entire estimated loss is
recorded  in  the  period.  Assets  related  to  these contracts are included in
current  assets  as  they  will  be  liquidated in the normal course of contract
completion,  although  this  may  require  more  than  one  year.

     All  contracts  are  for  products made to specific customer specifications
with  no  right  of  return.  All  units  are  shipped with a one-year warranty.

     The  Company's freight and delivery costs were $106,000 and $79,000 for the
years  ended  December 31, 2008 and 2007, respectively. These costs are included
in  selling,  general  and  administrative  expenses.

     The  fair  value of the Company's accounts receivable approximates carrying
value  due  to  the  short  term  nature of these amounts. The fair value of the
Company's  long-term obligations is estimated based on the current rates offered
to the Company for debt of similar terms and maturities.  Using this method, the
Company's  fair  value  of long-term obligations was not significantly different
from  the  stated  value  at  December  31,  2008  and  2007.

     Research  and  development  costs  are expensed when incurred.  The Company
expensed  approximately  $1,398,000  and $1,203,000 for research and development
during  the  years  ended  December  31,  2008  and  2007.

     NEW  ACCOUNTING  PRONOUNCEMENTS

     In  September 2006 the Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards No. 157, Fair Value Measurements
(SFAS  No.  157).  SFAS  No. 157 defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurement. SFAS
No.  157  also  emphasizes that fair value is a market-based measurement, not an
entity-specific  measurement,  and  sets  out  a  fair  value hierarchy with the
highest priority being quoted prices in active markets. Under SFAS No. 157, fair
value  measurements  are  disclosed  by level within that hierarchy. In February
2008,  the  FASB  issued  FASB  Staff Position No. 157-2, Effective Date of FASB
Statement  No.  157, which permits a one-year deferral for the implementation of
SFAS  No.  157  with  regard to nonfinancial assets and liabilities that are not
recognized or disclosed at fair value in the financial statements on a recurring
basis. The Company adopted SFAS No. 157 for the fiscal year beginning January 1,
2008,  except  for  nonfinancial  assets  and  nonfinancial liabilities that are
recognized  or  disclosed  at  fair  value  in  the  financial  statements  on a
nonrecurring  basis  for which delayed application is permitted until our fiscal
year  beginning  January 1, 2009. The Company is currently evaluating the impact
the remaining provisions of SFAS No. 157 will have on its consolidated financial
statements.

     In  December  2007,  the  FASB issued SFAS No. 141(Revised 2007), "Business
Combinations"  ("SFAS  No.  141R").  This  statement  requires  an  acquirer  to
recognize  the  assets acquired, the liabilities assumed, and any noncontrolling
interest  in the acquired at the acquisition date, measured at their fair values
as  of  that  date,  with  limited  exceptions  specified in the Statement. That
replaces  Statement 141's cost-allocation process, which required the cost of an
acquisition  to  be  allocated to the individual assets acquired and liabilities
assumed  based on their estimated fair values. Statement 141's guidance resulted
in  not  recognizing some assets and liabilities at the acquisition date, and it
also  resulted  in  measuring  some assets and liabilities at amounts other than
their  fair values at the acquisition date. This Statement applies prospectively
to  business  combinations  for  which  the  acquisition date is on or after the
beginning  of  the  first annual reporting period beginning on or after December
15, 2008. An entity may not apply it before that date. SFAS No. 141R will impact
the  Company  in  the  event  of  any  future  acquisitions.

In April, 2008, the FASB issued FSP FAS 142-3, "Determination of the Useful Life
of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors that should be
considered  in  developing  assumptions  about  renewal  or  extension  used  in
estimating  the  useful life of a recognized intangible asset under SFAS No. 142
and expands the disclosure requirements of SFAS 142. The provisions of FSP 142-3
are effective for the Company as of January 1, 2009. The provisions of FSP 142-3
for  determining  the  useful  life  of  a  recognized intangible asset shall be
applied  prospectively  to  intangible assets acquired after the effective date.
The  disclosure  requirements  shall  be applied prospectively to all intangible
assets  recognized  as of, and subsequent to, the effective date. The Company is
currently evaluating the impact of the adoption of FSP 142-3 on its consolidated
financial  statements.


3.  ACQUISITION:
----------------

     On  December  19,  2007,  the  Company  acquired  all  of  the  issued  and
outstanding  stock  of  Integrated  Consulting  Services,  Inc. d/b/a Integrated
Combat  Systems,  ("ICS"). The reasons for the acquisition were the expansion of
both customer and product bases, cross-marketing opportunities and the accretion
to  earnings.  The  acquisition  was  effective  December  31,  2007.  The total
transaction value was approximately $6,700,000 consisting of $5,400,000 in cash,
of  which  $4,500,000 was funded by a term loan, approximately 120,000 shares of
Orbit  stock  valued  at  approximately $1,000,000 (based on the volume weighted
average  closing  price of the Company's common stock for the twenty consecutive
trading  days  ending  December  14, 2007), and approximately $300,000 of direct
costs  related  to the purchase of ICS. Additionally, there is a contingent earn
out  of  $1,000,000  payable over the next three years based on ICS's ability to
attain  certain  revenue  levels  over  the  three  years. ICS did not meet that
revenue  level  during  the  year  ended  December  31,  2008, consequently, the
remaining  contingent earn out at December 31, 2008 is $667,000 payable over the
next  two  years.  The  ICS  acquisition  was  accounted  for as a purchase, and
accordingly,  the  assets  purchased and liabilities assumed are included in the
consolidated balance sheet as of December 31, 2007. The operating results of ICS
for  the  year  ended  December  31,  2007  are not included in the consolidated
financial  statements since the acquisition was not effective until December 31,
2007.


     In  accordance with SFAS No. 141, Business Combinations, the purchase price
was  allocated  to  the  tangible and intangible assets acquired and liabilities
assumed  based  on  their  estimated fair values. The excess purchase price over
those  fair values is recorded as goodwill. The fair values assigned to tangible
and  intangible  assets  acquired and liabilities assumed are based on estimates
and  assumptions  made  by management. In accordance with SFAS No. 142, Goodwill
and  Other  Intangible Assets, goodwill is not amortized but will be reviewed at
least  annually  for  impairment.  Purchased intangible assets with finite lives
will  be  amortized  on  a  straight-line  basis over their respective estimated
useful  lives.  Any  additional  goodwill  relating  to  the  remaining $667,000
contingent earn out based on ICS's ability to attain certain revenue levels over
the  next  two  years will be recorded, if necessary, in future years. The total
purchase  price  has  been  allocated  as  follows:



     Tangible  assets  and  liabilities:
      Cash                                            $1,942,000
      Accounts receivable                                579,000
      Inventory                                          352,000
      Other current assets                               273,000
      Property and equipment                             260,000
      Other long term assets                              11,000
      Accounts payable                                  (111,000)
      Note payable                                    (1,997,000)
      Accrued expenses                                   (73,000)
      Income tax payable                                (132,000)
      Deferred income                                   (247,000)
                                                      ----------

     Total net tangible assets and liabilities           857,000

      Amortizable intangible assets:
      Customer relationships                           2,000,000
      Non-compete agreement                              100,000
      Contract backlog                                   100,000
                                                      ----------
     Total amortizable intangible assets               2,200,000

      Goodwill                                         3,663,000
                                                       ---------
     Total purchase price                             $6,720,000
                                                      ==========


The  following  summarized pro forma financial information presents the combined
results  of  the Company as if the ICS acquisition had occurred as of January 1,
2007.  Adjustments,  which  reflect amortization of purchased intangible assets,
interest  on  debt to finance the acquisition, elimination of intercompany sales
and  purchases,  recalculation  of  bonuses  due  to  adjustments to net income,
adjustment to income taxes payable, and reversal of interest expense incurred by
ICS  have  been  made  to  the combined results of operations for the year ended
December  31,  2007. The unaudited summarized pro forma financial information is
presented  for informational purposes only and may not be indicative of what the
actual results of operations would have been had the acquisition occurred at the
beginning  of the periods presented nor does it purport to represent the results
of  operations  for  future  periods.




                                          Year ended
                                          December 31,
                                             2007
                                    (Pro forma and Unaudited)
                                    -------------------------

     Net  Sales                           $31,260,000
                                         ============

     Net  Income                           3,104,000
                                           =========

     Basic  earnings  per  share             0.69
                                             ====

     Diluted  earnings  per  share           0.65
                                             ====


4.  INVENTORIES:
----------------

Inventories  consist  of  the  following:

December 31,                     2008                 2007
------------                    ------             --------

Raw materials                $  7,108,000       $  6,146,000
Work-in-progress                3,853,000          3,639,000
Finished goods                    575,000            668,000
                             ------------        -----------
                              $11,536,000       $ 10,453,000
                             ============     ==============

5.  MARKETABLE SECURITIES:
--------------------------

Marketable  securities at December 31, 2008 and 2007 are
summarized  as  follows:


                                                  Unrealized
                                    Market         Holding
December 31, 2008        Cost       Value          Losses
-----------------        ----        -----          ------
Debt Securities       $1,324,000   $1,127,000    $  (197,000)
                       =========   ==========    ============

December 31, 2007
-----------------
Equity Securities     $2,275,000   $2,275,000          -
Debt Securities        1,774,000    1,722,000      $ (52,000)
                     -----------    ---------     -----------
Total                 $4,049,000   $3,997,000      $ (52,000)
                      ==========   ==========      ==========

Maturities of marketable securities classified as available-for-sale at December
31,  2008  are  as  follows:

Due after one year through five years     $572,000
Due after five years through ten years     403,000
Due after ten years                        349,000
                                         ---------
                                        $1,324,000
                                        ==========

During  2008  and  2007, the Company charged $130,000 and $50,000, respectively,
against investment and other income-net to record the impairment in market value
of  certain  available-for-sale  securities  deemed  to be other than temporary.

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS:
----------------------------------------

     Effective January 1, 2008 the Company adopted Statement No. 157, Fair Value
Measurements.  Statement  No. 157 applies to all assets and liabilities that are
being  measured  and  reported on a fair value basis. Statement No. 157 requires
new  disclosure  that  establishes a framework for measuring fair value in GAAP,
and expands disclosure about fair value measurements. This statement enables the
reader  of  the  financial statements to assess the inputs used to develop those
measurements by establishing a hierarchy for ranking the quality and reliability
of  the  information  used to determine fair values. The statement requires that
assets and liabilities carried at fair value will be classified and disclosed in
one  of  the  following  three  categories:
     Level  1:  Quoted  market  prices in active markets for identical assets or
liabilities.
     Level  2:  Observable  market  based inputs or unobservable inputs that are
corroborated  by  market  data.
     Level  3:  Unobservable  inputs  that  are not corroborated by market data.

     In  determining  the  appropriate  levels,  the Company performs a detailed
analysis  of  the  assets and liabilities that are subject to Statement No. 157.

     The table below presents the balances of assets and liabilities measured at
fair  value  on  a  recurring  basis  by  level  within  the  hierarchy.


                          Total     Level  1     Level  2     Level  3
                          -----     --------     --------     --------

Debt  Securities     $1,127,000     $1,127,000   $    -      $    -
                     ----------     ----------   --------     ------

Total  Assets        $1,127,000     $1,127,000   $    -      $    -
                     ==========     ==========   ========     ======


The  Company's  only  asset  or  liability  that  is  measured  at fair value on
recurring  basis  is  marketable  securities,  based  on quoted market prices in
active  markets  and  therefore  classified  as  level  1  within the fair value
hierarchy.


7.  COMPREHENSIVE (LOSS) INCOME:
-------------------------------

For  the  years  ended  December  31,  2008 and 2007, total comprehensive (loss)
income,  net of tax was $(6,099,000) and $2,544,000, respectively. Comprehensive
(loss)  income  consists of net (loss) income and unrealized gains and losses on
marketable  securities.


8.   INTANGIBLE ASSETS AND GOODWILL:
-----------------------------------

The Company applies SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 142
requires  that  an  intangible  asset  with  a finite life be amortized over its
useful  life and that goodwill and other intangible assets with indefinite lives
not  be  amortized  but  evaluated  for  impairment.

At December 31, 2008, the Company's intangible assets other than goodwill
consist of the following:

                       Estimated       Gross                             Net
                        Useful         Carrying    Accumulated         Carrying
                         Life          Value       Amortization         Value
                        -------        -------     ------------       ---------
Customer relationships  15 Years     $2,000,000    $ (133,000)       $1,867,000
Contract backlog       1-5 Years      1,750,000    (1,338,000)          412,000
Non-compete
 agreements              3 Years        415,000      (348,000)           67,000
                                      ---------    ----------         ----------
                                     $4,165,000   $(1,819,000)       $2,346,000
                                      ==========  ===========         ==========

At December 31, 2007, the Company's intangible assets other than goodwill
consist of the following:
                       Estimated        Gross                          Net
                        Useful        Carrying     Accumulated         Carrying
                         Life           Value      Amortization        Value
                        -------         -------    ----------          --------
Contract relationships  15 Years     $2,000,000   $     -            $2,000,000
Contract backlog       1-5 Years      1,750,000      (907,000)          843,000
Non-compete
 agreements              3 Years        415,000      (289,000)          126,000
                                     ----------    ----------       -----------
                                     $4,165,000   $(1,196,000)       $2,969,000
                                      =========    ===========       ==========

Amortization expense for the next five years is expected to be as follows:

     Year ending December 31,

     2009          497,000
     2010          250,000
     2011          133,000
     2012          133,000
     2013          133,000


The Company recognized amortization expense of $623,000 and $435,000 for the
years ended December 31, 2008 and 2007.

The  Company  performed  its  annual  impairment  test  of  goodwill  and  other
intangible  assets pursuant to SFAS 142.  The methods used to determine the fair
value  of the Company's reporting units were an income approach (discounted cash
flow  analysis  based  on  financial  and  operating  projections)  and a market
approach  (comparison of financial data for publicly traded companies engaged in
similar lines of business).  After completing the impairment testing of goodwill
and  other  intangible  assets,  it  was  determined  that the fair value of the
Company's  Tulip  and  ICS  reporting units, acquisitions made in 2005 and 2007,
respectively,  were  below  their carrying values of goodwill. Consequently, the
Company concluded an impairment charge of $6,889,000 should be taken at December
31,  2008.

9.  PROPERTY  AND  EQUIPMENT:
-----------------------------

Property and equipment at cost , consists of the  following:

December 31,                                    2008            2007
------------                                   -----           -----

Leasehold improvements                  $     274,000       $  206,000
Computer equipment                            487,000          429,000
Machinery and equipment                     1,421,000        1,384,000
Autos                                         101,000          101,000
Furniture and fixtures                        677,000          675,000
                                           -----------      ----------
                                            2,960,000        2,795,000
Accumulated depreciation and amortization  (2,305,000)      (2,104,000)
                                         ------------     ------------
                                        $     655,000      $   691,000
                                        =============     ============
       The  Company recognized depreciation and amortization expense of $203,000
and $126,000 for the years ended December 31, 2008 and 2007, respectively.




10.  DEBT:
------------

     The  Company has a credit agreement and three term loan agreements with the
same  commercial  lender.  In November 2008, the Company entered into an amended
$3,000,000  credit  facility  secured  by  accounts  receivable,  inventory  and
property and equipment ("Line of Credit"). The agreement will continue from year
to  year  thereafter  unless sooner terminated for an event of default including
non-compliance  with financial covenants. Loans under the facility bear interest
equal  to  the  sum  of  2.25%,  plus the one-month LIBOR (0.44% at December 31,
2008).  Outstanding  borrowings under the facility were $399,000 at December 31,
2008.
<TABLE>
<CAPTION>

The  Company's  long-term  debt  obligations  are  as  follows:
<S>                                                                                             <C>                  <C>
December 31,                                                                                  2008                 2007
--------------                                                                             ---------            ---------
Term loan agreement, collateralized by all business assets
of the Company, used to finance the acquisition of Tulip
("Tulip Shareholder Note"). Payable in thirty (30) monthly
payments of approximately $35,000. The loan bears interest
 equal to the one-month LIBOR rate (0.44% at December
 31, 2008) plus 2.50%.                                                                      $455,000               $875,000

Term loan agreement, collateralized by all business assets
 of the Company, used to finance the acquisition of Tulip
("Tulip Term Loan"). Payable in fifty-nine (59) monthly
principal payments of approximately $60,000 and a sixtieth
 payment of approximately $1,488,000 in 2010. The loan
 bears interest equal to the one-month LIBOR rate (0.44% at
 December 31, 2008) plus 2.50%.                                                            2,440,000              3,155,000


Term loan agreement, collateralized by all business assets
 of the Company, used to finance the acquisition of ICS
 ("The ICS Term Loan"). Payable in fifty-nine (59) monthly
 payments of approximately $54,000 and a sixtieth (60th)
 payment of approximately $1,339,000 in 2013. The loan
 bears interest equal to the one-month LIBOR rate (0.44%
at December 31, 2008) plus 2.25%.                                                          3,911,000              4,500,000
                                                                                        ------------         ---------------

                                                                                           6,806,000              8,530,000
Less: current portion                                                                      1,777,000              1,777,000
                                                                                        ------------         --------------
                                                                                          $5,029,000             $6,753,000
                                                                                        ============         ==============
 </TABLE>


     Principal  payments  due  on  the  Company's long-term debt are as follows:

Year ending December 31,

     2009                   $1,777,000
     2010                    2,404,000
     2011                      643,000
     2012                      643,000
     2013 and thereafter     1,339,000
                            ----------
                           $ 6,806,000
                          ============

The  Company  was not in compliance with two of its financial covenant ratios as
of September 30, 2008. In November 2008, the Company's primary lender waived the
covenant  default  of two of its financial covenant ratios at September 30, 2008
and  the  Company  renegotiated  the financial covenant ratios for the quarterly
reporting periods December 31, 2008 and March 31, 2009. Beginning June 30, 2009,
the covenants will revert back to their original ratios with a modification to a
certain  financial  ratio  covenant  definition. The lender instituted an unused
line  fee  of  .25%  per  annum,  as  the cost to the Company for the waiver and
amendment  to the loan agreements. In connection therewith, the interest rate on
the  Tulip  Term  Loan and Tulip Shareholder Note, increased to the sum of 2.50%
plus  the one month LIBOR and the interest rate on the ICS Term Loan and Line of
Credit  was  increased to the sum of 2.25% plus the one month LIBOR. The Company
was  in  compliance  with  all  of its financial covenant ratios at December 31,
2008.


11.  STOCK-BASED COMPENSATION PLANS:
------------------------------------

The  Company  has  various stock-based compensation plans, which provide for the
granting  of  nonqualified  and  incentive  stock options, as well as restricted
stock  awards  to  officers,  key employees and nonemployee directors. The plans
authorize  the  granting  to  officers  and  key  employees,  stock  options and
restricted stock awards, to acquire up to 1,891,000 common shares. Additionally,
the plans authorize the granting to nonemployee directors of the Company options
to  acquire  up to 125,000 common shares. Each plan grants options at the market
value  of  the  Company's stock on the date of such grant and all options expire
ten  years after granted. The terms and vesting schedules for share-based awards
vary  by  type  of  grant  and the employment status of the grantee with vesting
ranging  from  one to ten years. Generally the awards vest based upon time-based
conditions.  Stock  option  exercises  are  funded  through  the issuance of the
Company's  common stock. Stock compensation expense for the years ended December
31,  2008  and  2007  was  $250,000  and  $180,000,  respectively.


The  following  table  summarizes  activity  in  stock  options:

December 31,                     2008                           2007
------------       ----------------------------------    --------------------
                                          Average
                              Weighted-   Remaining                   Weighted-
                              Average     Contractual                 Average
                              Exercise    Term                        Exercise
                    Options   Price       (in years)       Options    Price
                    -------  ---------   ----------       --------   ----------
Outstanding at
 beginning of year   599,000    $3.15          4          607,000       $3.03

Granted                9,000     7.51          9            9,000        8.93

Forfeited             (9,000)    5.94          -           (1,000)       7.11

Exercised             (8,000)    1.26          -          (16,000)       1.92
                     --------   -----       ------       --------     -------
Outstanding at end of
 year                 591,000   $3.19          4          599,000       $3.15
                      =======   =====        ====         =======       =====
Outstanding
 exercisable at end
 of year              582,000   $3.13          4          590,000        $3.06
                      =======   =====        ====       =========       ======
Weighted-average fair
 value of options
 granted during
 the year                       $3.06                                    $3.82
                                =====                                   ======

The  following  table summarizes information about stock options outstanding and
exercisable  at  December  31,  2008:


                 Options  Outstanding                   Options  Exercisable
          ------------------------------------------    ---------------------
                                Weighted-
                                average     Weighted-               Weighted-
                                Remaining   average                 average
   Range  of       Number       Contractual Exercise    Number      Exercise
Exercise  Prices   Outstanding  Life/Years  Price       Exercisable Price
---------------    ----------   ------      ------      --------    ---------
$ .60  -  $1.07     170,000     2.00        $1.06        170,000     $1.06
$1.26  -  $1.62      17,000     1.00        $1.38         17,000     $1.38
$1.92  -  $2.04     143,000     6.00        $1.92        143,000     $1.92
$3.01  -  $3.70       4,000     4.00        $3.61          4,000     $3.61
$4.51  -  $9.07     257,000     5.00        $5.41        248,000     $5.34
---------------   ----------   -------      -----      ---------    -------
$ .60  -  $9.07     591,000     4.00        $3.19        582,000     $3.13
===============   =========    =====        ======      ========     ======


At  December  31,  2008, 277,000 shares of common stock were reserved for future
issuance  of  stock  options,  restricted  stock  and stock appreciation rights.

At  December  31, 2008, the aggregate intrinsic value of options outstanding and
exercisable was $127,000. At December 31, 2007, the aggregate intrinsic value of
options  outstanding  and  exercisable  was  $3,301,000.  The intrinsic value of
options  exercised  during  the  years  ended  December  31,  2008  and 2007 was
approximately  $30,000  and  $108,000,  respectively.

The  Company  estimated the fair value of its stock option awards on the date of
grant  using  the  Black-Scholes valuation model. The assumptions used for stock
option  grants  issued  during  the  following  periods  were  as  follows:

December  31,                                  2008                   2007
-------------                               --------           ------------

Expected  Volatility                    49.16%  to 49.62%     50.05%  to  51.19%

Risk-free interest rate                  3.70%  to  4.16%              5.00%

Expected  term  of  options (in years)          3.6                     3.6

Dividend  Yield                                  -                       -

Expected  volatility  assumptions  utilized  for 2008 and 2007 were based on the
volatility  of the Company's stock price for 3.6 years prior to grant date.  The
risk-free  rate  is  derived from the 10 year U.S. treasury yield on grant date.
Expected  life  for 2008 and 2007 was based on prior history of option activity.
Dividend  yield  is  based  on  prior  history  of  cash  dividends  declared.

The following table summarizes the Company's nonvested stock option activity for
the  year  ended  December  31,  2008:

                              Number  of        Weighted-Average
                                Shares          Grant-Date  Fair  Value
                                ------          -----------------------

Nonvested  stock  options
 at  January  1,  2008          9,000               $3.82

Granted                         9,000                3.06

Vested                         (8,000)               3.81

Forfeited                      (1,000)               3.92
                                -----                ----

Nonvested  stock  options
 at  December  31,  2008        9,000               $3.06
                                =====              ======

At  December  31, 2008, there was approximately $10,000 of unearned compensation
cost  related to the above non-vested stock options.  The cost is expected to be
recognized  over  the  next  six  months.

The  Company's stock based employee compensation plans allow for the issuance of
restricted  stock  awards  that  may  not be sold or otherwise transferred until
certain  restrictions have lapsed. The unearned stock-based compensation related
to  restricted stock granted is being amortized to compensation expense over the
vesting  period, which ranges from two to ten years. The share based expense for
these  awards was determined based on the market price of the Company's stock at
the date of grant applied to the total number of shares that were anticipated to
vest.  During  the  year ended December 31, 2008, approximately 40,000 shares of
restricted stock were awarded to senior management under the 2006 Employee Stock
Incentive  Plan.  As of December 31, 2008, the Company had unearned compensation
of  $1,040,000  associated  with  all  of the Company's restricted stock awards.


12.  EMPLOYEE BENEFIT PLAN:
--------------------------

    A  profit  sharing  and incentive-savings plan provides benefits to certain
employees  who  meet  specified  minimum  service and age requirements. The plan
provides for contributions by the Company equal to 1/2 of employee contributions
(but  not  more  than  2%  of  eligible  compensation)  and the Company may make
additional  contributions out of current or accumulated net earnings at the sole
discretion  of  the  Company's  board  of  directors.

The  Company  contributed approximately $235,000 and $237,000 to the plan during
the  years  ended  December  31,  2008  and  2007,  respectively.

13.  INCOME  TAXES:
--------------------

     The  Company  utilized  net  operating  loss carryforwards to offset income
taxes  except  for  a  $20,000 state income tax expense in Kentucky for the year
ended  December  31, 2008 and a $30,000 state income tax expense in Pennsylvania
for  the  year  ended  December  31,  2007.

     At  December  31, 2008 and 2007, the Company has an alternative minimum tax
credit  of approximately $573,000 with no limitation on the carryforward period.
The  Company  also  has  federal  and  state net operating loss carryforwards of
approximately  $20,000,000  and  $7,000,000, respectively, at December 31, 2008.
The  net  operating  loss  carry-forwards  expire  through  2020. Approximately,
$16,000,000  of  Federal  net  operating  loss  carry-forwards  expire  between
2010-2012.


     The  Company  recognized a $595,000 deferred tax benefit for the year ended
December  31,  2008  due to the reversal of the Company's deferred tax liability
relating  to its goodwill. The Company's goodwill impairment charge for the year
ended  December  31,  2008  resulted  in  a  deferred  tax  asset for the timing
difference of its goodwill. The Company also recorded a net deferred tax expense
of  $595,000  due  to  the  reversal  of  timing differences, utilization of net
operating  losses and an increase to its valuation allowance on its deferred tax
asset. The increase in its valuation allowance was due to the Company's decrease
in  confidence  in  attaining  projected  future  profitability.


The  Company  recognized  a  $595,000  deferred  tax  expense for the year ended
December  31,  2007.  This expense was recorded since the Company's deferred tax
liability  relating  to  its goodwill is required to be separately stated on its
financial  statements  apart  from  its  deferred  tax  asset.  The Company also
recorded  a deferred tax benefit of $595,000 by reducing its valuation allowance
on  its  deferred  tax  asset.  This  was  due  to  an increase in the Company's
projected  future  profitability  as  well  as an increase in the probability of
attaining  that  profitability.

The  reconciliation  of  income  tax  computed  at  the  U.S.  federal and state
statutory  tax  rates  to  income  tax  expense  is  as  follows:

December 31,                                             2008              2007
                                                        ------           ------
Tax at U.S. statutory rates                             (34.0%)           34.0%
State taxes                                               2.0%             7.0
Change in valuation allowance                            32.0%               -
Utilization of net operating loss carryforward             -             (40.0)
                                                       -------         --------
                                                           -               1.0%
                                                       =======         ========
The deferred tax asset is comprised of the following:

December 31,                                             2008              2007
------------                                            -----             -----

Alternative minimum tax credit carry-forward        $  573,000       $  573,000

Net operating loss and capital loss carryfowards
 (including pre-acquisition net operating loss
 carry-forwards)                                     6,972,000        7,399,000

Temporary differences in bases of assets and
 liabilities:

  Accounts receivable and inventory                    203,000          176,000
  Accrued expenses                                     212,000          140,000
  Stock-based compensation                              49,000           36,000
  Goodwill                                           1,677,000              -
  Intangible assets                                    432,000          305,000
  Deferred revenue                                     125,000          157,000
  Property and equipment                              (101,000)         (53,000)
                                                    ----------       ----------
                                                     2,597,000          761,000
                                                    -----------      -----------

Total deferred tax asset                            10,142,000        8,733,000

Valuation allowances                                (7,970,000)      (6,030,000)
                                                   -----------      ------------
Net deferred tax asset                              $2,172,000       $2,703,000
======================                              ==========     ============

Deferred tax liability-goodwill                          -            $(595,000)
===============================                      ==========      ===========

Deferred income taxes are included in the accompanying balance sheet as follows:



                                                 2008                   2007
                                                 ----                   ----
Current asset                                 $850,000              $1,025,000
Long-term asset                              1,322,000               1,678,000
Long-term liability                               -                   (595,000)
                                             ----------            -----------
                                            $2,172,000              $2,108,000
                                            ===========             ===========

On  January 1, 2007, the Company adopted FASB Interpretation No. 48, "Accounting
for  Uncertainty  in Income Taxes - an interpretation of FASB Statement No. 109"
("FIN  48").  This  interpretation  provides  criteria  for  the  recognition,
measurement,  presentation  and  disclosure  of  uncertain  tax positions. A tax
benefit  from an uncertain position may be recognized only if it is "more likely
that  not"  that  the  position  is  sustainable  based on its technical merits.
Additionally,  FIN  48  provides  guidance  on  derecognition,  classification,
interest  and  penalties,  accounting  in  interim  periods,  disclosure  and
transition.  There  was  no  impact  of  adoption  to the Company's consolidated
financial  position,  results  of  operations  or cash flows for the years ended
December  31,  2008  and 2007. The Company's policy is to recognize any interest
expense  and penalties related to potential income tax matters as a component of
income  tax  expense.


14.  SIGNIFICANT  CUSTOMERS  AND  CONCENTRATIONS  OF  CREDIT  RISK:
-------------------------------------------------------------------

Sales to significant customers accounted for approximately 38% (27% and 11%) and
36%  (14%,  12%  and  10%) of the Company's consolidated net sales for the years
ended  December  31,  2008  and  2007,  respectively.

Significant  customers  of  the  Company's  Electronics  Group  accounted  for
approximately 63% (36%, 17% and 10%) and 71% (20%, 15%, 15%, 11% and 10%) of the
Electronics  Group's  net  sales for the years ended December 31, 2008 and 2007,
respectively.

Significant  customers  of the Company's Power Group accounted for approximately
22%  (12%  and 10%) and 26% (16% and 10%) of the Power Group's net sales for the
years  ended  December  31,  2008  and  2007,  respectively.

A  substantial  portion  of the net sales is subject to audit by agencies of the
U.S.  government.  In  the  opinion of management, adjustments to such sales, if
any,  will  not  have  a material effect on the Company's consolidated financial
position  or  results  of  operations.

Financial instruments which potentially subject the Company to concentrations of
credit  risk  consist  principally  of  cash  and  trade  receivables  from  its
customers.

The  Company  performs  credit  evaluations  on  its customers and collateral is
generally  not  required.  Credit  losses  are  provided for in the consolidated
financial  statements  during  the  period  in  which  an  impairment  has  been
determined.

15.  LEASING ARRANGEMENTS:
--------------------------

     The  Company  entered  into  a  sale-leaseback of its operating facility in
2001.  The  initial  term  of  the  operating  lease  expires in 2013 and may be
extended  by  the  Company  at  its  option  through  February 2025. The Company
recorded  a deferred gain on the sale which is being recognized over the initial
term  of  the  lease.  Additional  operating  leases  are  for the Tulip and ICS
facilities,  a  sales  office,  vehicles  and  office  equipment.

     Future minimum lease payments as of December 31, 2008 under all operating
lease agreements that have initial or remaining noncancelable lease terms in
excess of one year are as follows:

Year ending December 31,
     2009                                789,000
     2010                                728,000
     2011                                694,000
     2012                                670,000
     2013                                240,000
     Thereafter                           36,000
                                       ---------
Total future minimum lease payments   $3,157,000
                                      ===========

Rent  expense  for  operating leases was approximately $711,000 and $567,000 for
the  years  ended  December  31,  2008  and  2007,  respectively.


16.  COMMITMENTS:
------------------

The  Company  entered  into  new  employment agreements with its three executive
officers, effective January 1, 2008, and also has employment agreements with six
other  principal  officers, for aggregate annual compensation of $2,162,000. All
employment  contracts  are  for  a  term  of three years except for one two year
contract with an executive officer of the Company. In addition, the three senior
officers  will  be entitled to bonuses based on certain performance criteria, as
defined,  and  the  other  six  officers  are  entitled  to  bonuses  based on a
percentage  of  earnings  before  taxes,  as  defined.  Total bonus compensation
expense was approximately $315,000 and $384,000 for the years ended December 31,
2008  and  2007,  respectively.

17.   BUSINESS SEGMENTS:
------------------------

     The  Company  operates  through  two  business  segments.  The  Electronics
Segment  is  comprised  of  the  Orbit  Instrument  Division  and  Tulip and ICS
subsidiaries. The Orbit Instrument Division and Tulip are engaged in the design,
manufacture  and  sale  of  customized electronic components and subsystems. ICS
performs  system  integration for Gun Weapons Systems and Fire Control Interface
as  well  as  logistics  support  and  documentation.  The Company's Power Units
Segment,  through  the  Behlman  Electronics, Inc. subsidiary, is engaged in the
design,  manufacture  and  sale of distortion free commercial power units, power
conversion  devices  and  electronic  devices  for  measurement and display. The
results  of  operations  for  the  year  ended  December  31,  2008  include the
operations  of  ICS  for  the  entire period since the acquisition was completed
effective  December  31,  2007.

     The  Company's  reportable segments are business units that offer different
products.  The Company's reportable segments are each managed separately as they
manufacture  and  distribute  distinct  products  with  different  production
processes.

The  following  is  the Company's business segment information as of and for the
years  ended  December  31,  2008  and  2007:

Year ended December 31,                           2008                    2007
                                               --------               --------
Net sales:

Electronics Group:
  Domestic                                     $15,678,000          $15,503,000
  Foreign                                        1,851,000            1,162,000
                                               -----------          -----------
Total Electronics Group                         17,529,000           16,665,000
                                               -----------          ------------
Power Group:
  Domestic                                       8,605,000            8,207,000
  Foreign                                        1,516,000            1,013,000
                                                ---------          ------------
Total Power Group                               10,121,000            9,220,000
                                                ----------         -------------
Intersegment Sales                                (286,000)                 -
                                                ----------          -----------
Total net sales                                $27,364,000          $25,885,000
                                              ============         ============
Income (loss) from operations:
  Electronics Group(1)                        $ (6,059,000)          $2,666,000
  Power Group                                    1,643,000            1,232,000
  General corporate expenses not allocated      (1,383,000)          (1,451,000)
  Interest expense                                (342,000)            (332,000)
  Investment and other income, net                 154,000              497,000
                                               -----------           ----------
  (Loss) income before income tax provision    $(5,987,000)          $2,612,000
                                               ===========          ===========

December 31,                                       2008                   2007
                                               ---------               --------
Assets:
  Electronics Group                            $12,888,000         $ 10,504,000
  Power Group                                    5,834,000            5,668,000
  General corporate assets not allocated        11,278,000           23,513,000
                                               -----------       --------------
       TOTAL ASSETS                            $30,000,000          $39,685,000
                                                ==========        =============


Depreciation and amortization:
  Electronics Group                            $   796,000         $    543,000
  Power Group                                       30,000               18,000
  Corporate                                         15,000               14,000
                                                 ----------           ----------
       TOTAL DEPRECIATION AND AMORTIZATION     $    841,000        $    575,000
                                               ============        ============

(1)  Includes  goodwill  impairment  charge of $6,889,000 in 2008.


18.  NET (LOSS) INCOME PER COMMON SHARE:
----------------------------------------

  The following table sets forth the computation of basic
and diluted net income per  common share:

Year Ended December 31,                               2008                2007
-----------------------                           --------            --------

Denominator:
  Denominator for basic net income (loss) per
  share -   weighted-average common shares          4,509,000         4,404,000

Effect of dilutive securities:
  Unearned portion of restricted stock awards           -                47,000
  Employee and director stock options                   -               229,000
                                                    ----------       -----------
Dilutive potential common shares                        -               276,000
                                                    ---------        -----------

Denominator for diluted net income (loss)
 per share - weighted-average common
 shares and assumed conversions                     4,509,000          4,680,000
                                                   ==========         ==========

The  numerator  for  basic and diluted net income (loss) per share for the years
ended  December  31,  2008  and  2007  is  the  net  (loss)income for each year.

During  the  year  ended  December  31,  2008,  the  Company  had a net loss and
therefore  did  not include 196,000 incremental common shares and options in its
calculation  of  diluted  net  loss  per common share since an inclusion of such
securities  would  be  anti-dilutive.

Stock  options  totaling  15,000  shares  were outstanding during the year ended
December  31,  2007,  but  were  not included in the computation of earnings per
share.  The  inclusion  of these instruments would have been antidilutive due to
the  options' exercise prices being greater than the average market price of the
Company's  common  shares  during  the  period.

19.   RELATED PARTY TRANSACTION:
--------------------------------

     Tulip  leases  its  facilities from a limited partnership, the ownership of
which  is  controlled  by  the former shareholders of Tulip. The five-year lease
commenced  April  2005 and provides for monthly payments of $9,100 and increases
by  2%  each  year for the first two renewal periods and by 3% for the final two
renewal  periods.  For  the  years  ended  December 31, 2008 and 2007, the total
amount  paid  under  this  lease  was  approximately  $116,000  and  $113,000,
respectively.



<PAGE>
------
                                   SIGNATURES
                                   ----------

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereto  duly  authorized.

     ORBIT  INTERNATIONAL  CORP.


Dated:  March  31,  2009          By:  /s/  Dennis  Sunshine
                                       ---------------------
                                  Dennis  Sunshine,  President
                                  and  Chief  Executive  Officer

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.


SIGNATURE                            TITLE                            DATE
---------                            -----                            ----

/s/ Dennis Sunshine        President, Chief Executive            March 31, 2009
-------------------           Officer and Director
Dennis Sunshine            (Principal Executive Officer)


/s/ Mitchell Binder         Executive Vice President,            March 31, 2009
 -------------------      Chief Financial Officer, and
Mitchell Binder                      Director
                           (Principal Financial and
                               Accounting Officer)

/s/ Bruce Reissman          Executive Vice President,            March 31, 2009
-------------------        Chief Operating Officer and
Bruce Reissman                     Director

/s/ Fredric Gruder                 Director                      March 31, 2009
-------------------
Fredric Gruder

/s/ Bernard Karcinell              Director                      March 31, 2009
----------------------
Bernard Karcinell

/s/ Lee Feinberg                   Director                      March 31, 2009
-----------------
Lee Feinberg

/s/ Sohail Malad                   Director                      March 31, 2009
-----------------
Sohail Malad