BusinessWire

Innovative Solutions & Support, Inc. Announces Second Quarter Fiscal 2020 Financial Results

EXTON, Pa.--(BUSINESS WIRE)--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,
2020

September 30,
2019

(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

 


Contacts

Investor Relations Contact:
Relland Winand
610-646-0350