Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the first quarter of fiscal year 2023, which ended December 31, 2022.
For the first quarter of fiscal 2023, net sales were $6.5 million compared to $6.7 million in the first quarter a year ago. Gross profit in the first quarter of 2023 was $3.7 million compared to $4.0 million in the first quarter of 2022. The Company reported net income of $0.7 million, or $0.04 per share in the first quarter, compared to $1.1 million, or $0.07 per share in the first quarter of fiscal 2022. The decrease in net income was driven by increases in general and administrative expenses, mainly attributable to non-cash, long-term incentive compensation and legal fees. IS&S generated $2.2 million in cash versus $1.4 million in the first quarter of fiscal 2022. Tax expense in the first quarter of fiscal 2023 was $0.2 million, compared to $0.3 million in the first quarter of fiscal 2022.
Shahram Askarpour, Chief Executive Officer of IS&S, said, “Overall, we continue to see solid demand in each segment of the business, including OEM, after-market and repairs, as we continue to generate strong cash flows. Looking forward, we are focused on driving organic and inorganic revenue growth as we work to increase our capacity utilization and operating leverage.”
The Company’s cash on hand increased to $19.4 million as of December 31, 2022, with $1.8 million generated from operating activities during the three months ended December 31, 2022. The Company continues to maintain its strong financial condition and flexibility with significant liquidity and no debt.
New orders in the first quarter of fiscal 2023 were approximately $3.3 million, and backlog as of December 31, 2022 was $8.5 million, compared to backlog of $6.2 million as of December 31, 2021. Only purchase orders in hand from the Pilatus PC-24, Textron King Air and the KC-46A long-term programs are included in the total backlog. IS&S expects these programs to remain in production for approximately a decade and anticipates that they will continue to add to the total backlog incrementally.
Conference Call
The Company will be hosting a conference call on Tuesday, February 14, 2023 at 4:30 PM ET to discuss these results and the Company’s business outlook and product development. Please use the following dial in number to register your name and company affiliation for the conference call: 877-451-6152 and ask to join the Innovative Solutions & Support call. 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), Auto-Throttle Systems 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 & Support, Inc.
|
||||||||
| Three Months Ended December 31, | ||||||||
2022 |
2021 |
|||||||
| Net Sales: | ||||||||
| Product | $ |
6,149,357 |
$ |
6,695,778 |
||||
| Engineering development contracts |
|
366,899 |
|
- |
||||
| Returns and allowances |
|
- |
|
- |
||||
| Total net sales |
|
6,516,256 |
|
6,695,778 |
||||
| Cost of sales: | ||||||||
| Product |
|
2,735,046 |
|
2,728,057 |
||||
| Engineering development contracts |
|
57,406 |
|
- |
||||
| Total cost of sales |
|
2,792,452 |
|
2,728,057 |
||||
| Gross profit |
|
3,723,804 |
|
3,967,721 |
||||
| Operating expenses: | ||||||||
| Research and development |
|
670,445 |
|
736,525 |
||||
| Selling, general and administrative |
|
2,261,863 |
|
1,806,982 |
||||
| Total operating expenses |
|
2,932,308 |
|
2,543,507 |
||||
| Operating income |
|
791,496 |
|
1,424,214 |
||||
| Interest income |
|
115,892 |
|
96 |
||||
| Interest (expense) | ||||||||
| Other income |
|
18,196 |
|
16,238 |
||||
| Income before income taxes |
|
925,584 |
|
1,440,548 |
||||
| Income tax expense |
|
226,933 |
|
307,490 |
||||
| Net income | $ |
698,651 |
$ |
1,133,058 |
||||
| Net income per common share: | ||||||||
| Basic | $ |
0.04 |
$ |
0.07 |
||||
| Diluted | $ |
0.04 |
$ |
0.07 |
||||
| Cash dividends per share: | $ |
- |
$ |
- |
||||
| Weighted average shares outstanding: | ||||||||
| Basic |
|
17,316,766 |
|
17,246,372 |
||||
| Diluted |
|
17,326,177 |
|
17,246,372 |
||||
| Innovative Solutions and Support, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
(unaudited) |
||||||||||
| December 31, | September 30, | |||||||||
2022 |
2022 |
|||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ |
19,443,231 |
|
$ |
17,250,546 |
|
||||
| Restricted cash |
|
- |
|
|
- |
|
||||
| Accounts receivable |
|
3,316,519 |
|
|
4,297,457 |
|
||||
| Contract asset |
|
162,742 |
|
|
162,742 |
|
||||
| Inventories |
|
5,252,295 |
|
|
5,349,104 |
|
||||
| Prepaid expenses and other current assets |
|
1,049,206 |
|
|
1,142,470 |
|
||||
| Total current assets |
|
29,223,993 |
|
|
28,202,319 |
|
||||
| Property and equipment, net |
|
6,239,496 |
|
|
6,292,189 |
|
||||
| Deferred income taxes |
|
331,176 |
|
|
46,487 |
|
||||
| Other assets |
|
160,862 |
|
|
164,328 |
|
||||
| Total assets | $ |
35,955,527 |
|
$ |
34,705,323 |
|
||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Current portion of capitalized lease obligations | $ |
- |
|
$ |
- |
|
||||
| Accounts payable | $ |
842,262 |
|
$ |
708,845 |
|
||||
| Dividends payable |
|
- |
|
|
- |
|
||||
| Accrued expenses |
|
2,508,971 |
|
|
2,972,275 |
|
||||
| Contract liability |
|
83,221 |
|
|
135,686 |
|
||||
| Total current liabilities |
|
3,443,012 |
|
|
3,940,303 |
|
||||
| Long-term portion of capitalized lease obligations |
|
- |
|
|
- |
|
||||
| Deferred revenue |
|
- |
|
|
- |
|
||||
| Deferred income taxes |
|
- |
|
|
- |
|
||||
| Other liabilities |
|
421,938 |
|
|
15,065 |
|
||||
| Total liabilities |
|
3,864,950 |
|
|
3,955,368 |
|
||||
| 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 December 31, 2022 and September 30, 2022 |
|
- |
|
|
- |
|
||||
| Common stock, $.001 par value: 75,000,000 shares authorized, | ||||||||||
| 19,470,248 and 19,412,664 issued at December 31, 2022 and September 30, 2022 |
|
19,470 |
|
|
19,413 |
|
||||
| Retained Earnings (accumulated deficit) |
|
339,609 |
|
|
(359,042 |
) |
||||
| Treasury stock, at cost, 2,096,451 shares at December 31, 2022 | ||||||||||
| and September 30, 2022 |
|
(21,368,537 |
) |
|
(21,368,537 |
) |
||||
| Total shareholders' equity |
|
32,090,577 |
|
|
30,749,955 |
|
||||
| Total liabilities and shareholders' equity | $ |
35,955,527 |
|
$ |
34,705,323 |
|
||||
| Innovative Solutions & Support, Inc. | ||||||||||||||
| Statements of Cash Flows | ||||||||||||||
(unaudited) |
||||||||||||||
| For the Three Months Ended December 31 , | ||||||||||||||
2022 |
2021 |
|||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
| Net income | $ |
698,651 |
|
$ |
1,133,058 |
|
||||||||
| Adjustments to reconcile net income to net cash | ||||||||||||||
| provided by operating activities: | ||||||||||||||
| Depreciation and amortization |
|
85,409 |
|
|
92,372 |
|
||||||||
| Share-based compensation expense | ||||||||||||||
| Stock options |
|
- |
|
|
45,591 |
|
||||||||
| Stock awards |
|
283,195 |
|
|
40,018 |
|
||||||||
| Deferred income taxes |
|
(284,689 |
) |
|
231,298 |
|
||||||||
| (Increase) decrease in: | ||||||||||||||
| Accounts receivable |
|
980,938 |
|
|
325,121 |
|
||||||||
| Inventories |
|
96,809 |
|
|
(61,083 |
) |
||||||||
| Prepaid expenses and other current assets |
|
93,264 |
|
|
(48,402 |
) |
||||||||
| Increase (decrease) in: | ||||||||||||||
| Accounts payable |
|
133,417 |
|
|
(123,156 |
) |
||||||||
| Accrued expenses |
|
(614,657 |
) |
|
(111,624 |
) |
||||||||
| Income taxes payable |
|
511,622 |
|
|
76,192 |
|
||||||||
| Contract liability |
|
(167,404 |
) |
|
(81,650 |
) |
||||||||
| Net cash provided by operating activities |
|
1,816,555 |
|
|
1,517,735 |
|
||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
| Purchases of property and equipment |
|
(32,716 |
) |
|
(77,348 |
) |
||||||||
| Proceeds from the sale of property and equipment |
|
- |
|
|||||||||||
| Net cash used in investing activities |
|
(32,716 |
) |
|
(77,348 |
) |
||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
| Proceeds from exercise of stock options |
|
408,846 |
|
|
- |
|
||||||||
| Net cash provided by financing activities |
|
408,846 |
|
|
- |
|
||||||||
| Net increase in cash and cash equivalents |
|
2,192,685 |
|
|
1,440,387 |
|
||||||||
| Cash and cash equivalents, beginning of year |
|
17,250,546 |
|
|
8,265,606 |
|
||||||||
| Cash and cash equivalents, end of year | $ |
19,443,231 |
|
$ |
9,705,993 |
|
||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230214005658/en/
Contacts
Investor Relations:
Michael Callahan
203-682-8311
isscir@icrinc.com
Press:
Jason Zywalewski
+1 610.646.9800 x609
jzywalewski@innovative-ss.com
