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.
Innovative Solutions and Support, Inc.
Consolidated Balance Sheets March 31,
September 30, 2018 2017 (unaudited)
ASSETS
Current assets Cash and cash equivalents $ 23,438,543 $ 24,680,301
Accounts receivable 2,373,627 2,748,597 Unbilled receivables
926,629 1,480,822 Inventories 4,440,542 4,179,654 Prepaid expenses
and other current assets 951,249 1,092,064 Total
current assets 32,130,590 34,181,438 Property and equipment,
net 6,588,808 6,669,011 Other assets 185,700 187,315
Total assets $ 38,905,098 $ 41,037,764
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 1,390,535 $ 1,321,251
Accrued expenses 1,554,859 1,760,037 Deferred revenue 220,245
280,354 Total current liabilities 3,165,639 3,361,642
Non-current deferred income taxes 129,574 67,742
Total liabilities 3,295,213 3,429,384
Commitments and contingencies (See Note 6)
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
March 31, 2018 and September 30, 2017
$ - $ -
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
18,937 18,880 Additional paid-in capital 51,783,779
51,583,841 Retained earnings 5,175,706 7,374,196
Treasury stock, at cost, 2,096,451 shares
at March 31, 2018 and September 30, 2017
(21,368,537 ) (21,368,537 ) Total shareholders'
equity 35,609,885 37,608,380 Total liabilities and
shareholders' equity $ 38,905,098 $ 41,037,764
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations (unaudited)
Three months ended Six months ended March 31, March 31,
2018 2017 2018
2017 Gross sales $ 3,727,204 $ 4,751,731 $ 6,815,188
$ 8,575,778 Returns and allowances - (97,829 )
- (556,009 ) Net Sales 3,727,204 4,653,902
6,815,188 8,019,769 Cost of sales 2,082,347
2,302,431 3,675,616 4,130,483
Gross profit 1,644,857 2,351,471 3,139,572 3,889,286
Operating expenses: Research and development 1,031,622
1,069,009 1,955,343 2,154,997 Selling, general and administrative
1,756,746 (1,703,456 ) 3,379,301
343,666 Total operating expenses 2,788,368 (634,447 )
5,334,644 2,498,663 Operating (loss) income (1,143,511 )
2,985,918 (2,195,072 ) 1,390,623 Interest income 11,681
9,947 21,305 19,823 Other income 15,664
4,140,210 37,096 4,159,326
(Loss) income before income taxes (1,116,166 ) 7,136,075 (2,136,671
) 5,569,772 Income tax expense 200,705
1,205,650 61,819 834,319
Net (loss) income $ (1,316,871 ) $ 5,930,425 $ (2,198,490 )
$ 4,735,453 Net loss per common share: Basic $ (0.08
) $ 0.35 $ (0.13 ) $ 0.28 Diluted $ (0.08 ) $ 0.35
$ (0.13 ) $ 0.28 Weighted average shares
outstanding: Basic
16,800,244
16,735,503 16,791,687
16,725,759 Diluted
16,800,244 16,847,059
16,791,687
16,835,756
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version on businesswire.com: https://www.businesswire.com/news/home/20180509006467/en/
Innovative Solutions & Support, Inc.Relland WinandChief
Financial Officer610-646-0350rwinand@innovative-ss.com
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