Innovative Solutions & Support, Inc. (“IS&S” or the
“Company”) (NASDAQ: ISSC) today announced its financial results for
the first quarter of fiscal 2016 ended December 31, 2015.
For the first quarter of fiscal 2016, the Company reported sales
of $6.6 million, compared to first quarter fiscal 2015 sales of
$6.7 million. Gross profit for the first quarter of 2016 was up 20%
from a year ago to $3.3 million, or 50.4% of revenues reflecting an
increased mix of product revenue. The Company reported a first
quarter fiscal 2016 net loss of $215,000, or ($0.01) per share,
compared to net income of $594,000, or $0.03 per share, in the
first quarter of fiscal 2015, with the loss in the current quarter
primarily attributable to an increase in legal expense and a
one-time marketing expense, partially off-set by reduced
compensation expense. In addition, first quarter fiscal 2015
earnings benefited from a tax benefit due to the retroactive
reinstatement of the R&D tax credit effective January 1,
2014.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
IS&S, said, “Revenues in the first quarter doubled compared to
the fourth quarter of fiscal 2015, reflecting further progress in
our transition to greater production revenue. In addition, our
gross margins increased to our historical product levels of over
50% in the current quarter compared to just 41% a year ago in the
same quarter as we grew our production revenues, on both an
absolute basis and as a proportion of our total revenue. We also
booked over $12 million of new orders in the quarter, the best
quarter of new business in over a year. Although the bottom line
was impacted, as anticipated, by an increase in legal expenses and
internally funded research and development costs, from an
operational perspective, we believe we are building momentum as
well as strengthening our overall financial position. The
challenges presented by new and expanding regulatory and
competitive demands are pressuring aircraft owners and operators to
seek new technology that can provide cost-effective and easily
implemented solutions. Innovative Solutions & Support’s legacy
has been built on our ability to respond to these market
opportunities. With a robust portfolio of products providing the
widest range of applications the Company has ever offered, we
believe we have a strong foundation to capitalize on a growing
market.”
New orders in the first quarter of fiscal 2016 were $12.3
million. Backlog was $13.3 million at December 31, 2015, up from
$7.6 million at September 30, 2105. 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, 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.
At December 31, 2015, the Company had $16.3 million of cash on
hand, essentially unchanged from September 30, 2015.
Shahram Askarpour, President of IS&S, added, "Our focus on
leveraging our growing portfolio of existing products has led to
new production programs that we expect to quickly lead to revenues
and generate attractive margins. Innovative Solutions and Support
has a long history of developing innovative new products, and the
increased investment in internally-funded research and development
over recent months has enabled us to introduce a number of new
products, the most recent of which is our patent pending
auto-throttle. In addition, our aggressive marketing efforts have
enabled us to penetrate potentially lucrative new geographic
markets where we previously had a minimal presence, including
Europe, the Middle East, and Asia, markets which are becoming
important components of our growth strategy. In the near term, our
goal is to sustain the momentum we have created, to diversify
across both markets and geographies, and to continue to provide the
market with price-for-performance solutions available to build our
franchise and grow the business."
Conference Call
The Company will be hosting a conference call February 11, 2016
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 3195580. 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.
Innovative Solutions and Support, Inc.
Consolidated Balance Sheets December
31, September 30, 2015 2015 (unaudited)
ASSETS
Current assets Cash and cash equivalents $ 16,273,491 $ 16,282,039
Accounts receivable 5,346,678 2,394,695 Unbilled receivables, net
2,686,324 3,920,209 Inventories 4,523,910 4,597,316 Deferred income
taxes 933,499 933,499 Prepaid expenses and other current assets
928,344 1,221,717 Total current assets 30,692,246
29,349,475 Property and equipment, net 7,047,627 7,095,330
Other assets 168,948 168,948 Total assets $
37,908,821 $ 36,613,753
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 2,570,818 $ 1,435,981
Accrued expenses 2,907,006 2,568,531 Deferred revenue 738,443
756,745 Total current liabilities 6,216,267 4,761,257
Deferred income taxes 507,184 507,184 Other liabilities
2,826 2,826 Total liabilities 6,726,277
5,271,267 Commitments and contingencies - -
Shareholders' equity
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
December 31, 2015 and September 30, 2015
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,756,089 issued at December 31, 2015 and
September 30, 2015, respectively
18,756 18,756 Additional paid-in capital 51,204,218
51,148,722 Retained earnings 603,330 818,768
Treasury stock, at cost, 1,846,451 shares
at December 31, 2015 and September 30, 2015, respectively
(20,643,760 ) (20,643,760 ) Total
shareholders' equity 31,182,544 31,342,486
Total liabilities and shareholders' equity $
37,908,821 $ 36,613,753
Innovative
Solutions and Support, Inc. Consolidated Statements of
Operations (unaudited) Three months ended
December 31, 2015 2014 Net sales $ 6,583,578 $
6,724,255 Cost of sales 3,267,767
3,962,450 Gross profit 3,315,811 2,761,805
Operating expenses: Research and development 931,600 654,999
Selling, general and administrative 2,692,944
1,940,491 Total operating expenses 3,624,544 2,595,490
Operating (loss) income (308,733 ) 166,315 Interest
income 7,025 5,885 Other income 32,410 10,822
(Loss) income before income taxes (269,298 ) 183,022
Income tax benefit (53,860 ) (410,720 ) Net
(loss) income $ (215,438 ) $ 593,742 Net (loss)
income per common share: Basic $ (0.01 ) $ 0.04 Diluted $
(0.01 ) $ 0.03 Weighted average shares outstanding:
Basic
16,909,638
16,955,726 Diluted
16,909,638 17,040,681
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version on businesswire.com: http://www.businesswire.com/news/home/20160210006580/en/
Innovative Solutions & Support, Inc.Relland WinandChief
Financial Officer610-646-0350rwinand@innovative-ss.com
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