Press Center

Innovative Solutions & Support, Inc. Announces Third Quarter Fiscal 2019 Financial Results

Wednesday, August 7, 2019 4:30 pm EDT

Dateline:

EXTON, Pa.

Public Company Information:

NASDAQ:
ISSC

EXTON, Pa.--(BUSINESS WIRE)--Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (ISSC) today announced its financial results for the third quarter of fiscal 2019, ended June 30, 2019.

For the third quarter of fiscal 2019, the Company reported net sales of $4.6 million, an increase of 35% as compared to net sales of $3.4 million in the third quarter a year ago. The Company reported third quarter net income of $511,000, or $0.03 per share, compared to a net loss of $1.0 million, or ($0.06) per share in the third quarter of fiscal 2018. Revenues are also up sequentially from $4.2 million in the second quarter of fiscal 2019.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “Third quarter results for revenues, net income and cash flow, continue to reflect the steady improvement seen over the course of this fiscal year. In addition, during the quarter we received the first and only Federal Aviation Administration (FAA) Supplemental Type Certification (STC) for its patented ThrustSense® Autothrottle for retrofit in the King Air, a dual turbo prop aircraft. This STC serves as the foundation for additional STCs that we believe will open significant market opportunity.”

At June 30, 2019, the Company had $22.6 million of cash on hand, an increase as net cash flows from operating activities were in excess of $1.3 million for the quarter. New orders in the third quarter of fiscal 2019 were approximately $3.9 million, and backlog as of June 30, 2019, was $4.6 million. Backlog excludes potential future sole-source production orders from the Pilatus PC-24 and the KC-46A programs, both of which are currently in production. The Company expects both programs to remain in production for multiple years and that these contracts will add to production sales already in backlog.

Nine Months Results

Total sales for the nine months ended June 30, 2019, were $12.8 million compared to $10.2 million for the nine months ended June 30, 2018. For the nine months ended June 30, 2019, the Company reported net income of $0.9 million, or $0.05 per share, a significant improvement from a net loss of $3.2 million, or ($0.19) per share for the first nine months of fiscal 2018.

Conference Call

The Company will be hosting a conference call on Thursday, August 8, 2019, 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 website 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

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

(unaudited)

 

 

 

ASSETS

Current assets
Cash and cash equivalents

$

22,563,411

 

$

20,390,713

 

Accounts receivable

 

1,441,827

 

 

3,449,893

 

Contract asset

 

30,170

 

 

-

 

Inventories

 

4,445,184

 

 

4,280,108

 

Prepaid expenses and other current assets

 

576,842

 

 

544,234

 

 
Total current assets

 

29,057,434

 

 

28,664,948

 

 
Property and equipment, net

 

8,541,798

 

 

8,786,737

 

Other assets

 

160,157

 

 

181,993

 

 
Total assets

$

37,759,389

 

$

37,633,678

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 
Current liabilities
Accounts payable

$

823,137

 

$

1,529,792

 

Accrued expenses

 

1,412,579

 

 

1,463,021

 

Contract liability

 

183,011

 

 

356,801

 

 
Total current liabilities

 

2,418,727

 

 

3,349,614

 

 
Non-current deferred income taxes

 

129,627

 

 

129,594

 

 
Total liabilities

 

2,548,354

 

 

3,479,208

 

 
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 June 30, 2019 and September 30, 2018

$

-

 

$

-

 

 
Common stock, $.001 par value: 75,000,000 shares authorized, 19,005,487 and 18,937,050 issued at June 30, 2019 and September 30, 2018, respectively

 

19,006

 

 

18,937

 

 
Additional paid-in capital

 

51,987,096

 

 

51,783,779

 

Retained earnings

 

4,573,470

 

 

3,720,291

 

Treasury stock, at cost, 2,096,451 shares at June 30, 2019 and
September 30, 2018

 

(21,368,537

)

 

(21,368,537

)

 
Total shareholders' equity

 

35,211,035

 

 

34,154,470

 

 
Total liabilities and shareholders' equity

$

37,759,389

 

$

37,633,678

 

 

Innovative Solutions and Support, Inc.

Consolidated Statements of Operations

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 
Net Sales

 

4,589,824

 

3,389,663

 

 

12,770,601

 

10,204,851

 

 
Cost of sales

 

2,064,617

 

1,806,980

 

 

5,733,385

 

5,482,596

 

 
Gross profit

 

2,525,207

 

1,582,683

 

 

7,037,216

 

4,722,255

 

 
Operating expenses:
Research and development

 

722,525

 

1,028,271

 

 

1,967,379

 

2,983,614

 

Selling, general and administrative

 

1,416,053

 

1,626,640

 

 

4,414,126

 

5,005,941

 

Total operating expenses

 

2,138,578

 

2,654,911

 

 

6,381,505

 

7,989,555

 

 
Operating income (loss)

 

386,629

 

(1,072,228

)

 

655,711

 

(3,267,300

)

 
Interest income

 

99,916

 

15,164

 

 

147,948

 

36,469

 

Other income

 

24,714

 

16,128

 

 

57,314

 

53,224

 

Income (loss) before income taxes

 

511,259

 

(1,040,936

)

 

860,973

 

(3,177,607

)

 
Income tax expense

 

-

 

101

 

 

7,794

 

61,920

 

 
Net income (loss)

$

511,259

$

(1,041,037

)

$

853,179

$

(3,239,527

)

 
Net income (loss) per common share:
Basic

$

0.03

$

(0.06

)

$

0.05

$

(0.19

)

Diluted

$

0.03

$

(0.06

)

$

0.05

$

(0.19

)

 
Weighted average shares outstanding:
Basic

 

16,880,341

 

16,816,838

 

 

16,860,503

 

16,800,070

 

Diluted

 

16,978,643

 

16,816,838

 

 

16,898,321

 

16,800,070

 

 

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Contact:

Relland Winand
Chief Financial Officer
610-646-0350