Innovative Solutions & Support, Inc. Announces Second Quarter Fiscal 2018 Financial Results
Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (ISSC) today announced its financial results for the second quarter of fiscal 2018 ended March 31, 2018.
For the second quarter of fiscal 2018, the Company reported net sales of $3.7 million, compared to second quarter fiscal 2017
sales of $4.7 million. The Company reported a net loss of $1.3 million, or ($0.08) per share, for the second quarter of 2018
compared to net income of $5.9 million, or $0.35 per share, in the second quarter a year ago. Second quarter 2017 profitability
benefitted from a $3.6 million reduction to selling, general and administrative expenses as well as $4.1 million in other income,
both arising from the settlement of a lawsuit.
Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “We continue to invest in new product research and
development which we believe will enable the Company to sustain growth over the long term. These efforts yielded our second STC in
just the last few quarters; a standalone Autothrottle for the PC-12 that can be installed and operated without upgrading the
cockpit display system, thereby proving a highly cost-effective upgrade solution. Work has begun on the development of a standalone
Autothrottle for the King Air, which we believe can greatly expand our total market opportunity for Autothrottle. We expect that it
should be a straightforward task to complete the development and obtain an STC on the King Air, which would then make IS&S the
sole source for a standalone Autothrottle for this aircraft. In the near term we continue to focus on our strategy to increase both
revenues and backlog.”
Subsequent to March 31, 2018, the company intends to use $2.4 million of cash to acquire a King Air airplane to be used in
research and development activities.
At March 31, 2018, the Company had $23.4 million of cash on hand.
New orders in the second quarter of fiscal 2018 were $4.2 million and backlog as of March 31, 2018 was $3.8 million. Backlog
excludes potential future sole-source production orders from products in development under the Company’s engineering development
contracts, including the Pilatus PC-24, and the KC-46A, all of which the Company expects to remain in production for a decade
following completion of their respective development phases. The Company expects that these contracts will add to production sales
already in backlog.
Shahram Askarpour, President of IS&S, added, "The increase in both revenues and backlog in the second quarter is consistent
with our expectation for steady improvement compared to the first quarter. The number of aircraft benefitting from our many
products is increasing. Consequently, we continue to see an increase in repeat, intra-quarter book-and-ship business from
customers, as well as solid demand for customer service arising as our installed base of products expands. Over the last several
quarters we have maintained our commitment to research and development, which has enabled us to introduce a number of new products,
including the first Autothrottle for turboprops integrated with our display system, and now a standalone Autothrottle. We are
confident that our strategy to develop innovative technologies that improve safety, situational awareness and reduce the cost of
operation is building long-term shareholder value.”
Six Months Results
Total sales for the six months ended March 31, 2018 were $6.8 million, compared to $ 8.0 million for the six months ended March
31, 2017. For the six months ended March 31, 2018, the net loss was $2.2 million compared to net income of $4.7 million for the
first half of fiscal 2017. Six months results for fiscal 2017 reflect the unusual items recognized in the second quarter as
described above.
Conference Call
The Company will be hosting a conference call on Thursday, May 10, 2018 at 10:00 a.m. ET to discuss these results and its
business outlook. Please use the following dial in number to register your name and company affiliation for the conference call:
877-883-0383 and enter the PIN Number 2478592. The call will also be carried live on the Investor Relations page of the Company web
site at www.innovative-ss.com.
About Innovative Solutions & Support, Inc.
Headquartered in Exton, Pa., Innovative Solutions & Support, Inc. (www.innovative-ss.com) is a systems integrator that designs and manufactures flight guidance and cockpit display
systems for Original Equipment Manufacturers (OEMs) and retrofit applications. The company supplies integrated Flight Management
Systems (FMS) and advanced GPS receivers for precision low carbon footprint navigation.
Certain matters contained herein that are not descriptions of historical facts are “forward-looking” (as such term is defined
in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results
may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to
differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those
discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the
Company’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on
forward-looking statements, which reflect management’s views only as of the date hereof. The Company undertakes no obligation to
revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new
information, future events or otherwise.
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| Innovative Solutions and Support, Inc. |
| Consolidated Balance Sheets |
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March 31, |
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September 30, |
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2018 |
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2017 |
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(unaudited) |
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ASSETS
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| Current assets |
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| Cash and cash equivalents |
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$ |
23,438,543 |
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$ |
24,680,301 |
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| Accounts receivable |
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2,373,627 |
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2,748,597 |
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| Unbilled receivables |
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926,629 |
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1,480,822 |
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| Inventories |
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4,440,542 |
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4,179,654 |
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| Prepaid expenses and other current assets |
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951,249 |
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1,092,064 |
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| Total current assets |
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32,130,590 |
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34,181,438 |
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| Property and equipment, net |
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6,588,808 |
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6,669,011 |
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| Other assets |
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185,700 |
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187,315 |
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| Total assets |
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$ |
38,905,098 |
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$ |
41,037,764 |
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LIABILITIES AND SHAREHOLDERS' EQUITY
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| Current liabilities |
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| Accounts payable |
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$ |
1,390,535 |
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$ |
1,321,251 |
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| Accrued expenses |
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1,554,859 |
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1,760,037 |
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| Deferred revenue |
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220,245 |
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280,354 |
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| Total current liabilities |
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3,165,639 |
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3,361,642 |
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| Non-current deferred income taxes |
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129,574 |
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67,742 |
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| Total liabilities |
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3,295,213 |
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3,429,384 |
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| Commitments and contingencies (See Note 6) |
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| Shareholders' equity |
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Preferred stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are
authorized as Class A Convertible stock. No shares issued and outstanding at March 31, 2018 and September 30, 2017
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$ |
- |
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$ |
- |
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Common stock, $.001 par value: 75,000,000 shares authorized, 18,937,050 and 18,879,580 issued at
March 31, 2018 and September 30, 2017, respectively
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18,937 |
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18,880 |
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| Additional paid-in capital |
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51,783,779 |
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51,583,841 |
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| Retained earnings |
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5,175,706 |
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7,374,196 |
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Treasury stock, at cost, 2,096,451 shares at March 31, 2018 and September 30, 2017
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(21,368,537 |
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(21,368,537 |
) |
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| Total shareholders' equity |
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35,609,885 |
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37,608,380 |
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| Total liabilities and shareholders' equity |
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$ |
38,905,098 |
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$ |
41,037,764 |
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| Innovative Solutions and Support, Inc. |
| Consolidated Statements of Operations |
| (unaudited) |
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Three months ended |
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Six months ended |
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March 31, |
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March 31, |
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2018 |
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2017 |
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2018 |
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2017 |
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| Gross sales |
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$ |
3,727,204 |
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$ |
4,751,731 |
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$ |
6,815,188 |
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$ |
8,575,778 |
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| Returns and allowances |
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- |
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(97,829 |
) |
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- |
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(556,009 |
) |
| Net Sales |
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3,727,204 |
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4,653,902 |
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6,815,188 |
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8,019,769 |
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| Cost of sales |
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2,082,347 |
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2,302,431 |
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3,675,616 |
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4,130,483 |
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| Gross profit |
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1,644,857 |
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2,351,471 |
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3,139,572 |
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3,889,286 |
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| Operating expenses: |
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| Research and development |
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1,031,622 |
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1,069,009 |
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1,955,343 |
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2,154,997 |
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| Selling, general and administrative |
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1,756,746 |
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(1,703,456 |
) |
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3,379,301 |
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343,666 |
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| Total operating expenses |
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2,788,368 |
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(634,447 |
) |
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5,334,644 |
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2,498,663 |
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| Operating (loss) income |
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(1,143,511 |
) |
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2,985,918 |
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(2,195,072 |
) |
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1,390,623 |
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| Interest income |
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11,681 |
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9,947 |
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21,305 |
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19,823 |
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| Other income |
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15,664 |
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4,140,210 |
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37,096 |
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4,159,326 |
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| (Loss) income before income taxes |
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(1,116,166 |
) |
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|
7,136,075 |
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(2,136,671 |
) |
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5,569,772 |
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| Income tax expense |
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200,705 |
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1,205,650 |
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61,819 |
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834,319 |
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| Net (loss) income |
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$ |
(1,316,871 |
) |
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$ |
5,930,425 |
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$ |
(2,198,490 |
) |
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$ |
4,735,453 |
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| Net loss per common share: |
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| Basic |
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$ |
(0.08 |
) |
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$ |
0.35 |
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$ |
(0.13 |
) |
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$ |
0.28 |
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| Diluted |
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$ |
(0.08 |
) |
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$ |
0.35 |
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$ |
(0.13 |
) |
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$ |
0.28 |
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| Weighted average shares outstanding: |
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| Basic |
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16,800,244 |
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16,735,503 |
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16,791,687 |
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16,725,759 |
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| Diluted |
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16,800,244 |
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16,847,059 |
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16,791,687 |
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|
16,835,756 |
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Innovative Solutions & Support, Inc.
Relland Winand
Chief Financial Officer
610-646-0350
rwinand@innovative-ss.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180509006467/en/