Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the second quarter of fiscal 2020, ended March 31, 2020.
For the second quarter of fiscal 2020, the Company reported net sales of $4.8 million, compared to $4.2 million in the second quarter a year ago. The Company reported net income of $438,000 or $0.03 per share, compared to $202,000, or $0.01 per share, in the second quarter of fiscal 2019.
Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “We have not escaped the threat of the coronavirus pandemic, but have taken immediate remedial actions to minimize its impact to our business. We have taken aggressive steps to protect the health and well-being of our employees, their families, our customers and our other partners. As a result, we have been able to safely keep our operation open and, as an essential service, continue to meet our obligation to fill our customers’ orders.
“In fact, the March quarter was our strongest quarter in four years, with growth in revenues, new orders, backlog and cash flow. In addition, we expect to begin shipping a new OEM AutoThrottle order before the end of this fiscal year. While this pandemic and the evolving containment and relief measures that accompany it make it particularly difficult to forecast future sales, we are confident that the progress we have achieved has us well-positioned to prosper over the long-term.”
Cash flow from operations was approximately $500,000 for the quarter, so that at March 31, 2020 the Company had $22.6 million of cash on hand.
New orders in the second quarter of fiscal 2020 were $8.3 million, and backlog as of March 31, 2020, was nearly $10 million, the highest backlog in several years. Backlog excludes potential future sole-source production orders from the Pilatus PC-24 and the KC-46A programs both of which the Company expects to remain in production for a decade. The Company expects that these contracts will add to production sales already in backlog.
Six Months Results
Total sales for the six months ended March 31, 2020 were $9.3 million compared to $8.2 million for the six months ended March 31, 2019. For the six months ended March 31, 2020, the Company reported net income of $766,000, or $0.04 per share, up from $342,000, or $0.02 per share, for the first half of fiscal 2019.
Conference Call
The Company will be hosting a conference call on Thursday, May 14, 2020, at 10:00 a.m. 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: 877-270-2148 and ask to be joined into 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), AutoThrottle 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 and Support, Inc. | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
March 31,
|
September 30,
| |||||||||||
(unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 22,644,037 | $ | 22,416,830 | ||||||||
| Accounts receivable | 2,684,981 | 2,348,537 | ||||||||||
| Contract asset | 186,848 | 80,182 | ||||||||||
| Inventories | 4,821,062 | 4,470,694 | ||||||||||
| Prepaid expenses and other current assets | 1,057,797 | 642,049 | ||||||||||
| Total current assets | 31,394,725 | 29,958,292 | ||||||||||
| Property and equipment, net | 8,282,858 | 8,444,692 | ||||||||||
| Other assets | 230,678 | 154,041 | ||||||||||
| Total assets | $ | 39,908,261 | $ | 38,557,025 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 1,355,755 | $ | 1,079,073 | ||||||||
| Accrued expenses | 1,177,065 | 1,110,918 | ||||||||||
| Contract liability | 97,136 | 29,231 | ||||||||||
| Total current liabilities | 2,629,956 | 2,219,222 | ||||||||||
| Non-current deferred income taxes | 129,689 | 129,651 | ||||||||||
| Other liabilities | 5,637 | - | ||||||||||
| Total liabilities | 2,765,282 | 2,348,873 | ||||||||||
| 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 March 31, 2020 and September 30, 2019 | $ | - | $ | - | ||||||||
| Common stock, $.001 par value: 75,000,000 shares authorized, 19,080,877 and 19,005,487 issued at March 31, 2020 and September 30, 2019, respectively | 19,081 | 19,006 | ||||||||||
| Additional paid-in capital | 52,155,835 | 51,987,096 | ||||||||||
| Retained earnings | 6,336,600 | 5,570,587 | ||||||||||
| Treasury stock, at cost, 2,096,451 shares at March 31, 2020 and September 30, 2019 | (21,368,537 | ) | (21,368,537 | ) | ||||||||
| Total shareholders' equity | 37,142,979 | 36,208,152 | ||||||||||
| Total liabilities and shareholders' equity | $ | 39,908,261 | $ | 38,557,025 | ||||||||
| Innovative Solutions and Support, Inc. | ||||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
March 31, | March 31, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
| Net Sales | 4,835,065 | 4,203,127 | 9,346,493 | 8,180,777 | ||||||||||||||||
| Cost of sales | 2,539,894 | 1,856,921 | 4,449,675 | 3,668,768 | ||||||||||||||||
| Gross profit | 2,295,171 | 2,346,206 | 4,896,818 | 4,512,009 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 712,019 | 648,482 | 1,378,634 | 1,244,854 | ||||||||||||||||
| Selling, general and administrative | 1,531,389 | 1,524,657 | 3,234,663 | 2,998,073 | ||||||||||||||||
| Total operating expenses | 2,243,408 | 2,173,139 | 4,613,297 | 4,242,927 | ||||||||||||||||
| Operating income | 51,763 | 173,067 | 283,521 | 269,082 | ||||||||||||||||
| Interest income | 65,721 | 26,480 | 144,591 | 48,032 | ||||||||||||||||
| Other income | 11,219 | 10,746 | 28,499 | 32,600 | ||||||||||||||||
| Income before income taxes | 128,703 | 210,293 | 456,611 | 349,714 | ||||||||||||||||
| Income tax (benefit) expense | (309,402 | ) | 7,794 | (309,402 | ) | 7,794 | ||||||||||||||
| Net income | $ | 438,105 | $ | 202,499 | $ | 766,013 | $ | 341,920 | ||||||||||||
| Net income per common share: | ||||||||||||||||||||
| Basic | $ | 0.03 | $ | 0.01 | $ | 0.05 | $ | 0.02 | ||||||||||||
| Diluted | $ | 0.03 | $ | 0.01 | $ | 0.04 | $ | 0.02 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 16,931,138 | 16,860,568 | 16,920,087 | 16,850,584 | ||||||||||||||||
| Diluted | 17,123,388 | 16,875,720 | 17,102,483 | 16,858,160 | ||||||||||||||||
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Contacts:
Relland Winand
610-646-0350
