UNITED  STATES 
                SECURITIES  AND  EXCHANGE  COMMISSION 
                        Washington, DC  20549 
                                   
                             FORM  10-Q 
 
 
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 
                    SECURITIES EXCHANGE  ACT  OF  1934 
 
For the quarterly period ended          June 30, 1998             
                                 OR 
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 
            SECURITIES  EXCHANGE  ACT  OF  1934 
For the quarterly period ended                to                  
 
Commission file number             0-3936                         
               Orbit International Corp.                          
(Exact name of registrant as specified in its charter) 
     Delaware                         ID #   11-1826363           
(State or other jurisdiction      (I.R.S. Employer Identification 
 incorporation or organization)      Number) 
     80 Cabot Court, Hauppauge, New York               11788      
(Address of principal executive offices               (Zip Code) 
                    (516) 435-8300                                
     (Registrant's telephone number, including area code) 
                              N/A                                 
(Former name, former address and former fiscal year, if changed 
  since last report) 
 
        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 month (or for such shorter 
period that the registrant was required to file such reports), and (2) 
has been subject to such filing requirements for the past 90 days. 
                                   Yes     X        No            
 
          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
               PROCEEDING DURING THE PRECEDING FIVE YEARS: 
 
        Indicate by check mark whether the registrant has filed all 
documents and reports required to be filed by Sections 12, 13 or 15 (d) 
of the Securities Exchange Act of 1934 subsequent to the distribution 
of securities under a plan confirmed by a court. 
                                    
                                   Yes     X        No            
 
          APPLICABLE ONLY TO CORPORATE ISSUERS: 
 
       Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date: 
June 30, 1998.                                            6,230,000    
                                                 
 
 
 
 
 
 
 
 
 
 
                      ORBIT INTERNATIONAL CORP. 
 
 
     The financial information herein is unaudited.  However, in the 
opinion of management, such information reflects all adjustments 
(consisting only of normal recurring accruals) necessary to a fair 
presentation of the results of operations for the periods being reported.  
Additionally, it should be noted that the accompanying condensed 
financial statements do not purport to contain complete disclosures in 
conformity with generally accepted accounting principles. 
 
     The results of operations for the six months ended June 30, 1998 are 
not necessarily indicative of the results of operations for the full 
fiscal year ending December 31, 1998. 
 
     The consolidated balance sheet as of December 31, 1997 was condensed 
from the audited consolidated balance sheet appearing in the 1997 annual 
report on Form 10-K. 
 
     These condensed consolidated statements should be read in 
conjunction with the Company's financial statements for the fiscal year 
ended December 31, 1997. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                   Part I - Financial Information 
                              Item - I 
                                   
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
                CONDENSED CONSOLIDATED BALANCE SHEETS 
                                         
 
                                             June 30,  December 31, 
                                               1998        1997 
                                           (unaudited) 
 
ASSETS 
 
 
Current assets: 
 
 Cash and cash equivalents...............  $ 1,725,000    $ 1,096,000 
 Investment in marketable securities.....    2,798,000      2,004,000 
 Accounts receivable (less allowance for 
  doubtful accounts).....................    2,459,000      3,045,000 
 Inventories ............................    7,175,000      6,319,000   
 Restricted investments, related to 
  discontinued operations................       53,000        451,000 
 Assets held for sale, net...............       97,000        265,000 
 Other current assets....................      334,000        304,000 
 Deferred tax asset......................      770,000           -     
   Total current assets..................   15,411,000     13,484,000 
 
 Property, plant and equipment - at cost 
  less accumulated depreciation and 
  amortization...........................    2,309,000      2,342,000 
 
 Excess of cost over the fair value of 
   assets acquired.......................    1,203,000      1,251,000 
 
 Investment in marketable securities.....      438,000        470,000 
 
 Other assets............................      444,000        352,000 
 Deferred tax asset......................      380,000           -      
 
 TOTAL ASSETS............................  $20,185,000    $17,899,000 
 
 
 
 
 
 
 
                       See accompanying notes. 
 
 
 
 
 
 
 
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
                CONDENSED CONSOLIDATED BALANCE SHEETS 
                             (continued) 
 
 
 
                                               June 30,   December 31, 
                                                 1998         1997 
                                             (unaudited) 
 
LIABILITIES AND STOCKHOLDERS' EQUITY 
 
 
Current liabilities: 
 
 Current portion of long-term obligations.. $ 1,568,000    $1,624,000 
 Accounts payable..........................   1,166,000     1,086,000 
 Accrued expenses..........................   2,425,000     2,114,000 
 Customer advances.........................   1,459,000          - 
 Notes payable.............................     148,000        97,000 
 Accounts payable, accrued expenses and 
  reserves for discontinued operations.....     869,000       900,000 
 Due to factor.............................      32,000       260,000 
 
   Total current liabilities...............   7,667,000     6,081,000 
 
Long-term obligations, less current 
 portion...................................   2,999,000     3,667,000 
Accounts payable, accrued expenses and 
 reserves for discontinued operations, 
 less current portion......................     592,000       864,000 
 
   Total liabilities.......................  11,258,000    10,612,000 
 
STOCKHOLDERS' EQUITY 
 
Common stock - $.10 par value..............     912,000       909,000 
Additional paid-in capital.................  23,553,000    23,538,000 
Accumulated deficit........................  (5,896,000)   (7,477,000) 
Less treasury stock, at cost...............  (9,588,000)   (9,588,000) 
Less deferred compensation.................     (58,000)      (97,000) 
Less unrealized gain on marketable 
 securities................................       4,000         2,000  
 
 Total stockholders' equity................   8,927,000     7,287,000 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $20,185,000   $17,899,000 
 
 
 
 
                       See accompanying notes. 
 
 
 
 
      
 
           
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
                             (unaudited) 
 
 
 
                         Six Months Ended        Three Months Ended 
                              June 30,                 June 30, 
                          1998        1997         1998        1997 
                        
 
Net sales...........  $ 8,520,000 $ 8,396,000  $ 4,235,000 $ 4,426,000 
 
Cost of sales.......    4,881,000   4,901,000    2,372,000   2,526,000 
 
Gross profit........    3,639,000   3,495,000    1,863,000   1,900,000 
 
Selling, general and 
 administrative 
 expense............    2,724,000   2,664,000    1,407,000   1,437,000 
Class action litigation 
 settlement.........      500,000        -         500,000        - 
Interest expense....      184,000      77,000       89,000      37,000 
Investment and 
 other(income)......   (  200,000) (  140,000)    ( 93,000)   ( 59,000) 
Income (loss) before  
 income tax benefit.      431,000     894,000      (40,000)    485,000 
 
Income tax benefit..    1,150,000        -       1,150,000        -    
 
NET INCOME..........  $ 1,581,000 $   894,000   $1,110,000  $  485,000 
 
Net income per common 
 share: 
  Basic.............     $  .26     $   .15      $    .18      $  .08 
  Diluted...........     $  .22     $   .13      $    .16      $  .07 
   
 
 
 
 
                                                   
                                   
                                   
                                   
                                   
                       See accompanying notes. 
                                   
 
 


 
 
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                             (unaudited) 
 
                                                    Six Months Ended 
                                                        June 30, 
                                                    1998        1997 
 
Cash flows from operating activities: 
 Net income..................................  $1,581,000   $  894,000  
  Adjustments to reconcile net income      
  to net cash provided by (used in) 
  operating activities: 
  Depreciation and amortization..............      68,000       68,000 
  Amortization of goodwill...................      48,000       36,000 
  Compensatory issuance of stock.............      39,000       38,000 
  Change in value of marketable trading  
  securities.................................       2,000        2,000 
  Deferred tax asset.........................  (1,150,000)        -    
Changes in operating assets and liabilities: 
 Accounts receivable.........................     586,000      455,000 
 Inventories.................................    (856,000)    (566,000) 
 Other current assets........................     (30,000)       3,000  
 Accounts payable............................      80,000      187,000 
 Accrued expenses............................     311,000     (547,000) 
 Customer advances...........................   1,459,000         - 
 Assets held for sale........................     168,000      524,000  
 Accounts payable, accrued expenses and 
  reserves for discontinued operations.......    (303,000)  (1,670,000) 
 Other assets................................     (92,000)    (125,000) 
 
 
Net cash provided by (used in)   
   operating activities......................   1,911,000     (701,000) 
 
Cash flows from investing activities: 
 Acquisitions of fixed assets................     (35,000)     (50,000)  
  
 Purchase of marketable securities...........  (3,013,000)  (3,149,000)  
     
 Proceeds from sales of marketable securities   2,649,000    4,012,000   
 
   
Net cash provided by (used in)                     
   investing activities......................    (399,000)     813,000 
 
 
 
 
 
 
(continued) 
 
 
 
 
 
 
 
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                             (unaudited) 
                             (continued) 
 
 
                                                   Six Months Ended 
                                                        June 30, 
                                                   1998         1997 
 
Cash flows from financing activities: 
 Due to factor...............................    (228,000)    (148,000) 
 Repayments of debt..........................    (752,000)    (617,000) 
 Proceeds of debt............................      79,000       27,000 
 Stock option exercises......................      18,000     ___9,000 
Net cash (used in) financing activities......    (883,000)    (729,000) 
 
 
NET INCREASE (DECREASE) IN CASH AND CASH  
 EQUIVALENTS.................................     629,000     (617,000)  
 
                                    
Cash and cash equivalents - January 1........   1,096,000      927,000 
 
 
CASH AND CASH EQUIVALENTS -June 30...........  $1,725,000  $   310,000   
 
 
 
 
 
Supplemental disclosures of cash flow 
  information: 
                                                   
       Cash paid for: 
 
       Interest.............................. $184,000     $   328,000 
                           
       Taxes................................. $ 13,000     $    26,000 
 
 
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                       See accompanying notes. 
 
 
 
                                   
 
 
 
                
                                   
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                             (unaudited) 
                                   
(NOTE 1) - Income Per Share: 
 
     The following table sets forth the computation of basic and 
diluted income per common share: 
                                   Six Months Ended      Three Months Ended  
          
                                       June 30,              June 30,        
         
                                    1998      1997        1998      1997  
Denominator: 
 Denominator for basic 
  income per share - 
  weighted-average common           
  shares                         6,143,000  6,014,000  6,150,000  6,018,000 
      
Effect of dilutive securities: 
 Employee and directors 
  stock options                    770,000    511,000    735,000    483,000 
 Warrants                          189,000    149,000    185,000    144,000 
 Unearned stock award               58,000    107,000     56,000    104,000 
 
 
Denominator for diluted 
 income per share -  
 weighted-average common 
 shares and assumed 
 conversion                      7,160,000  6,781,000  7,126,000  6,749,000  
       
 
 
     The numerator for basic and diluted income per share for the six   
months ended June 30, 1998 and June 30, 1997 is the net income for each 
period. 
 
(NOTE 2) - Cost of Sales: 
 
     For interim periods, the Company estimates its inventory and 
related gross profit. 
 
(NOTE 3) - Inventories: 
 
     Inventories are comprised of the following: 
 
                                   June 30,           December 31, 
                                     1998                1997 
 
Raw materials..............     $ 2,501,000           $ 2,262,000 
Work-in-process............       4,674,000             4,057,000 
 
                TOTAL           $ 7,175,000           $ 6,319,000 
 
(continued) 
 
 
                                   
                                   
                                   
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                             (unaudited) 
                             (continued) 
                                   
(NOTE 4) - Available-For-Sale Securities: 
 
     Under the terms of certain credit facilities, the Company's 
investment portfolio and certain cash balances must be maintained at a 
minimum collateral value.  On June 30, 1998, this collateral requirement 
amounted to approximately $53,000. 
 
     The following is a summary of available-for-sale securities as of: 
 
                                                   June 30, 1998 
                                                             Estimated 
                                                               Fair 
                                                  Cost         Value 
 
U.S. Treasury bills......................... $ 2,553,000    $ 2,553,000 
      
  
Corporate debt securities ..................     732,000        736,000 
                                             ___________    ___________ 
                                               3,285,000      3,289,000 
      
Restricted value of portfolio 
 used to collateralize credit facility......      53,000         53,000 
 
 
Balance of securities portfolio............. $ 3,232,000    $ 3,236,000 
 
 
     The amortized cost and estimated fair value of debt and marketable 
equity securities at June 30, 1998 by contractual maturity, are shown 
below.  Expected maturities will differ from contractual maturities 
because the issuers of the securities may have the right to repay 
obligations without prepayment penalties.                    
                                                     June 30, 1998 
                                                             Estimated 
                                                               Fair 
                                                  Cost         Value 
 
Due in one year or less....................  $ 2,849,000    $ 2,851,000 
Due after one year through three years.....      228,000        229,000 
Due after three years......................      208,000        209,000 
                                               3,285,000      3,289,000 
 
Restricted value of portfolio used to 
 collateralize credit facilities...........       53,000         53,000 
 
                                             $ 3,232,000    $ 3,236,000 
 
(continued) 
 
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                             (unaudited) 
                             (continued) 
(NOTE 5)  -  Business Segments: 
 
     The Company operates through two business segments.  Its Electronics 
Segment, through the Orbit Instrument Division, is engaged in the design, 
manufacture and sale of customized electronic components and subsystems.  
Its 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 Company's reportable segments are business units that offer 
different products.  The reportable segments are each managed separately 
because they manufacture and distribute distinct products with different 
production processes. 
 
     The following is the business segment information for the six and 
three month periods ended June 30, 1998 and 1997. 
                                 
                          Six Months Ended        Three Months Ended 
                             June 30,                June 30, 
                          1998       1997          1998      1997 
Net sales: 
   Electronics......... $ 5,512,000 $ 4,490,000    $ 2,804,000 $2,376,000 
   Power Units.........   3,071,000   3,906,000      1,473,000  2,050,000 
           
          Total         $ 8,583,000 $ 8,396,000    $ 4,277,000 $4,426,000 
 
Income from operations: 
   Electronics......... $ 1,453,000 $   913,000    $   816,000 $  497,000 
   Power Units.........    (109,000)    258,000       (133,000)   141,000 
General corporate 
  expenses not  
  allocated (a)........    (929,000)   (340,000)      (727,000)  (175,000) 
Interest expense.......    (184,000)    (77,000)       (89,000)   (37,000) 
Investment and other  
  income...............     200,000     140,000         93,000     59,000 
 
Income before income  
taxes.                  $   431,000 $   894,000    $   (40,000) $ 485,000 
 
(a) Includes $500,000 for the class action securities litigation 
settlement for the six and three months ended June 30, 1998, 
respectively.  (See Note 6). 
 
(NOTE 6)  -  Settlement of Class Action Securities Litigation: 
     In July, 1998, the Company reached a settlement with respect to the 
USA Classic, Inc. class action securities litigation.  Such settlement is 
subject to an executed "Stipulation of Settlement" by each of the parties 
and approval of such by the court.  The Company's portion of the 
settlement was $1,000,000, of which $500,000 had been previously accrued. 
           
(continued)                                                  
 
 
 
 
 
 
 
 
 
                              Item - II 
                                   
             ORBIT INTERNATIONAL CORP. AND SUBSIDIARIES 
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
                        RESULTS OF OPERATIONS 
                                   
 
Results of Operations 
 
Three month period ended  June 30, 1998 v. June 30, 1997 
 
      The Company currently operates in two industry segments.  Its Orbit 
Instrument Division is engaged in the design and manufacture of 
electronic components and subsystems (the "Electronics Segment").  Its 
Behlman subsidiary is engaged in the design and manufacture of commercial 
power units (the "Power Units Segment"). 
 
     Consolidated net sales for the six month period ended June      30, 
1998 increased to $8,520,000 from $8,396,000 for the six month period 
ended June 30, 1997 due principally to increased sales from the Company's 
Electronic Segment partially  offset by decreased sales from the 
Company's Power Unit Segment. 
 
     Gross profit as a percentage of sales  for the six month period 
ended June 30, 1998 increased to 42.7% from 41.6% for the six month 
period ended June 30, 1997 due principally to a higher gross profit 
yielded from the Electronics Segment. 
 
     Selling, general and administrative expenses for the six months 
ended June 30, 1998 slightly increased to $2,724,000 from $2,664,000 for 
the six month period ended June 30, 1997 due principally to higher 
selling, general and administrative costs incurred by the Electronics 
Segment due to increased selling and marketing efforts.  Selling, general 
and administrative expenses, as a percentage of sales for the six month 
period ended June 30, 1998 slightly increased to 32.0% from 31.7% for the 
comparable period in 1997.   
 
     In July, 1998, the Company reached a settlement with respect to the 
USA Classic class action securities litigation subject to an executed 
"Stipulation of Settlement" by each of the parties and approval of such 
by the court.  The Company's portion of the settlement was $1,000,000 of 
which $500,000 had been previously accrued.  Accordingly, the Company 
recorded an additional charge of $500,000 during the second quarter of 
1998.     
 


 
 
 
     Interest expense for the  six month period ended June 30, 1998 
increased to $184,000 from $77,000 for the six month period ended     
June 30, 1997 due to interest recorded in the current period by the 
Company related to a certain debt obligation of the discontinued apparel 
operations. 
 
     Investment and other income for the six month period ended          
June 30, 1998 increased to $200,000 from $140,000 for the six month 
period ended June 30, 1997 due principally to an increase in funds 
available for investment during the current period. 
 
     In connection with the resolution of the USA Classic class action 
securities litigation and its related uncertainties and the consistent 
earnings from its continuing operations, pursuant to Statement of 
Financial Accounting Standards No. 109, "Accounting for Income Taxes", 
the Company recorded a deferred tax asset of $1,150,000 during the second 
quarter of 1998. 
 
     Net income for the six month period ended June 30, 1998 increased to 
$1,581,000 from $894,000 for the six month period ended June 30, 1997 due 
principally to the recognition of a deferred tax asset recorded  during 
the second quarter of 1998 partially offset by the additional charge of 
$500,000 recorded in connection with the settlement of the class action 
securities litigation.  Excluding the impact of the income tax benefit 
and the settlement of the class action litigation, net income for the six 
month period ended June 30, 1998 increased to $931,000 from $894,000 for 
the same period last year. 
 
 
Three Month period ended June 30, 1998 v. June 30, 1997 
 
     Consolidated net sales for the three month period ended June 30, 
1998 decreased to $4,235,000 from $4,426,000 for the three month period 
ended June 30, 1997 due principally to decreased sales from the Company's 
Power Units Segment partially offset by increased sales from the 
Electronics Segment. 
 
     Gross profit, as a percentage of sales, for the three months ended  
  June 30, 1998 increased to 44.0% from 42.9% for the three month period 
ended June 30, 1998 due to a higher gross profit margin yielded from the 
Electronics Segment due to increased sales. 
 
     Selling, general and administrative expenses for the three month 
period ended June 30, 1998 slightly decreased to $1,407,000 from 
$1,437,000 due principally to lower selling, general and administrative 
costs from the Power Units Segment, lower corporate costs and offset by 
higher costs from the Electronics Segment due to increased sales and 
marketing efforts.  Selling, general and administrative expenses, as a 
percentage of sales, for the three months ended June 30, 1998 slightly 
increased to 33.2% from 32.5% for the comparable period in 1997 due 
principally to increased sales in the prior period. 
 
 
     In July, 1998, the Company reached a settlement with respect to the 
USA Classic class action securities litigation subject to an executed 
"Stipulation of Settlement" by each of the parties and approval of such 
by the court.  The Company's portion of the settlement was $1,000,000 of 
which $500,000 had been previously accrued.  Accordingly, the Company 
recorded an additional charge of $500,000 during the three months ended 
June 30, 1998. 
 
     Interest expense for the three month period ended June 30, 1998 
increased to $89,000 from $37,000 for the three month period ended June 
30, 1997 due to interest recorded in the current period by the Company 
related to a certain debt obligation of the discontinued apparel 
operations. 
 
 
     Investment and other income for the three month period ended June 
30, 1998 increased to $93,000 from $59,000 for the three month period 
ended June 30, 1997 due to an increase in funds available for investment 
during the current period. 
 
     In connection with the resolution of the USA Classic class action 
securities litigation and its related uncertainties and the consistent 
earnings from its continuing operations, pursuant to Statement of 
Financial Accounting Standards No. 109, "Accounting for Income Taxes", 
the Company recorded a deferred tax asset of $1,150,000 during the three 
months ended June 30, 1998. 
 
     Net income for the three month period ended June 30, 1998 increased 
to $1,110,000 from $485,000 for the three month period ended June 30, 
1997 due principally to the deferred tax asset recorded partially offset 
by the additional charge of $500,000 recorded in connection with the 
settlement of the class action securities litigation.  Excluding the 
impact of the income tax benefit and the settlement of the class action 
litigation, net income for the three month period ended June 30, 1998 
decreased to $460,000 from $485,000 for the same period last year. 
 
Liquidity, Capital Resources and Inflation: 
  
     Working capital increased to $7,744,000 at June 30, 1998 compared to 
$7,403,000 at December 31, 1997.  The ratio of current assets to current 
liabilities slightly decreased to 2.0 to 1 at June 30, 1998 from 2.2 to 
1 at December 31, 1997. 
 
     Net cash flows provided by operations for the six months ended June 
30, 1998 was approximately $1,911,000 primarily attributable to the net 
income for the period, a decrease in accounts receivable and an increase 
in customer advances which was partially offset by the recording of a 
deferred tax asset and an increase in inventory.  Cash flows used in 
investing activities for the six months ended June 30, 1998 totaled 
approximately $399,000 primarily attributable to the net purchases of 
marketable securities.  Cash flows used in financing activities for the 
six months ended June 30, 1998 totaled approximately $883,000 primarily 
attributable to repayments of long-term debt and a decrease in amounts 
due to factor. 
 
     All operations of the discontinued apparel companies have been 
terminated.  All losses and obligations of these apparel operations have 
been provided for, and accordingly, the Company does not anticipate using 
any significant portion of its resources towards these discontinued 
apparel operations. 
 
     In August 1998, the Company closed on a new $4,000,000 Mortgage and 
Term Loan facility with a new lender secured  by real property and other 
assets of the Company.  The Company used $3,500,000 of the proceeds to 
replace its existing asset based lending arrangement and the remaining 
$500,000 will be used to partially fund the class action securities 
litigation settlement of $1,000,000. 
 
     Under the Company's factoring arrangement for its discontinued 
Canadian apparel operations, the Company has provided a standby letter of 
credit as security for its guaranty under this lending facility, 
collaterallized by marketable securities.  As of June 30, 1998, the 
Company had provided approximately $49,000 in a standby letter of credit 
which was reduced to approximately $35,000 in July, 1998 due to the 
paydown of amounts owed to the factor. 
 
     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 the foreseeable future. 
 
     Inflation has not materially impacted the operations of the 
Company. 
 
Certain Material Trends 
 
       Despite continued profitability in 1997 and through the first two 
quarters of 1998, the Company continues to face a difficult business 
environment with continuing pressure on the Company's prices for its sole 
source sales and a general reduction in the level of funding for the 
defense sector.  Based on current delivery schedules, however, revenues 
for the Company should be sustained at the levels recorded in 1997. 
 
     The Company continues to seek new contracts which require incurring 
up-front design, engineering, prototype and preproduction 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  
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 the Company has completed the design and preproduction 
stage, there is no assurance that funding will be provided for future 
production. 
 
     The Company is heavily dependent upon military spending as a source 
of revenues and income.  World events have led the U. S. Government to 
reevaluate the level of military spending necessary for national 
security.  Any significant reductions in the level of military spending 
by the U. S. Government 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 Instrument 
Division is beginning to introduce certain of its products into 
commercial markets. 
 
     In December 1997, the Company retained OEM Capital Corp ("OEM"), an 
investment banking firm specializing in the electronics, communications 
and computer industries, to assist the Company in identifying viable 
acquisition opportunities.  Although the Company is committed to 
enhancing its sales and profitability through strategic acquisitions as 
well as through internal growth, there is no guarantee that OEM will 
present acquisition candidates that will ultimately result in a 
transaction for the Company. 
 
Year 2000 
 
     The Company has developed a plan to modify its information 
technology systems to recognize the Year 2000, including the purchase of 
a new manufacturing software package, and has begun converting its 
critical data processing systems.  The Company expects the project to be 
completed by the end of 1998 and to cost between approximately $100,000 
and $150,000.  This estimate includes the price of new software and 
internal costs but excludes the costs to upgrade and replace systems in 
the normal course of business as well as potential costs for outside 
consultants to assist the Company in the implementation of a new software 
package.  The Company does not expect this project to have a material 
effect on its operations in 1998 and did not expend any significant 
amount of money on this project for the six months ended June 30, 1998.  
The Company has also initiated discussions with its significant 
suppliers, large customers and financial institutions to ensure that 
these parties have appropriate plans to remediate Year 2000 issues where 
their systems interface with Company systems or otherwise impact its 
operations.  The Company is assessing the extent to which its operations 
are vulnerable should these organizations fail to properly remediate 
their computer systems. 
 
     While the Company intends to use diligent efforts and care to 
implement the plan set forth above and to take any other necessary steps 
with regard to its information technology systems to prepare for the Year 
2000, there is no assurance that such steps will effectively accomplish 
such goal.  Furthermore, any failure on the part of the Company's primary 
suppliers, service providers and customers to adapt their respective 
information technology systems to recognize the Year 2000 could adversely 
impact the Company. 
 
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 as well as statements made in press releases and oral statements 
that may be made by the Company or by officers, directors or employees of 
the Company acting on the Company's behalf that are not statements of 
historical or current fact constitute "forward-looking statements" within 
the meaning of the Private Securities Litigation Reform Act of 1995.  
Such forward-looking statements involve known and unknown risks, 
uncertainties and other factors that could cause the actual 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.  In addition to statements which explicitly describe such 
risks and uncertainties, readers are urged to consider statements labeled 
with the terms "believes", "belief", "expects", "intends", "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. 
 
 
 


 
 
 
 
 
                                   
                                   
                                   
                             SIGNATURES 
 
 
 
     Pursuant to the requirements of the Securities Exchange Act of 
  
1934, the registrant has dully caused this report to be signed on its 
 
behalf by the undersigned thereunto duly authorized. 
 
 
                      ORBIT INTERNATIONAL CORP. 
                             Registrant 
 
 
 
 
 
Dated:  August 13, 1998            /s/ Dennis Sunshine 
                                   Dennis Sunshine, President, Chief    
                                   Executive officer and Director 
 
 
 
Dated:  August 13, 1998            /s/ Mitchell Binder 
                                   Mitchell Binder, Vice President- 
                                   Finance, Chief Financial Officer 
                                   and Director 
                          
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               PART II 
                                   
                                   
                          OTHER INFORMATION 
 
 
 
Item 1.   Legal Proceedings 
 
In re USA Classic Securities Litigation: 
 
In July, 1998, the Company reached a settlement with respect to the USA 
Classic, Inc. class action securities litigation.  Such settlement is 
subject to an executed "Stipulation of Settlement" by each of the parties 
and approval of such by the court.  The Company's portion of the 
settlement was $1,000,000. 
 
Item 4.   Submission of matters to a vote of security holders 
 
          An Annual Meeting of Stockholders of the Company was held on 
June 26, 1998.  The holders of 6,222,593 shares of Common Stock of the 
Company were entitled to vote at the meeting, the holders of 5,869,883 
shares of Common Stock, or approximately 94% of shares entitled to vote 
at the meeting, were represented by proxy.  The following action took 
place: 
 
     1.   The stockholders voted for the election of each of the 
following persons nominated to serve as a director of the Company until 
the next annual meeting and until his successor is elected and qualified:  
Dennis Sunshine by 5,706,132 votes for and 159,751 against, Bruce 
Reissman by 5,716,209 votes for and 159,664 against, Mitchell Binder by 
5,706,232 votes for and 159,651 against, John Molloy by 5,706,232 votes 
for and 159,651 against, Stanley Morris by 5,706,232 votes for and 
159,651 against and Marc Pfefferle by 5,706,232 for and 159,651 against. 
 
     2.   The stockholders voted 5,837,588 for and 23,884 against the 
resolution relating to the notification of Ernst & Young LLP as the 
independent auditors and accountants for the Company for the year ended 
December 31, 1998 (4,411 votes abstained). 
 
Item 6.   Exhibits and reports on Form 8-K 
 
          (a)   Exhibits.   None