Innovative Solutions & Support, Inc. Announces Second Quarter Fiscal 2021 Financial Results

Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the second quarter of fiscal 2021, ended March 31, 2021.

For the second quarter of fiscal 2021 the Company reported net sales of $5.1 million compared to $4.8 million in the second quarter a year ago. The Company reported net income of $0.6 million, or $0.04 per share, compared to $0.4 million or $0.03 per share, in the second quarter of fiscal 2020.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, “Over the past three months we grew revenues, generated positive cash flow and reported another profitable quarter, achieving the ongoing objectives that we believe increase the value of Innovative Solutions. Results in the second quarter were once again driven by our strategy to increasingly diversify our end markets, targeting both OEM production programs as well as retrofit opportunities in the commercial air transport, military, and general aviation markets. Sales of our ThrustSense® AutoThrottle continue to grow. The growing air cargo market is creating opportunities for our Boeing 757 and 767 Flat Panel Display Systems as evidenced by orders received from Amazon. Additionally, we have announced a new lower cost AutoThrottle that we believe enhances our offering in an expanding market. As the pandemic recedes, we remain confident that over the longer term the capabilities and price-for-performance characteristics of our technology will strengthen our brand globally.”

Cash flow from operations was approximately $0.6 million for the quarter, so that at March 31, 2021, the Company had $6.0 million of cash on hand. Since September of 2020, nearly $20 million of cash has been distributed to our shareholders while remaining in excellent financial condition with significant liquidity and no debt.

New orders in the second quarter of fiscal 2021 were $7.6 million, and backlog as of March 31, 2021 was $6.7 million, an increase from $4.2 million at December 31, 2020. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, Textron King Air and the KC-46A programs, 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, 2021 were $10.0 million compared to $9.3 million for the six months ended March 31, 2020. For the six months ended March 31, 2021, the company reported net income of $0.8 million, or $0.05 per share, versus $0.8 million, or $0.04 per share for the first half of fiscal 2020 which included a $0.3 million tax benefit.

Conference Call

The Company will be hosting a conference call on Thursday, May 13, 2021, 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), 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 and Support, Inc.
Consolidated Balance Sheets
   
 

March 31,

 

September 30,

 

 

2021

 

 

 

2020

 

  (unaudited)
ASSETS
Current assets  
Cash and cash equivalents  

$

5,997,691

 

$

12,603,967

 

Restricted cash  

 

-

 

 

11,180,900

 

Accounts receivable  

 

2,847,567

 

 

4,369,111

 

Inventories  

 

4,654,111

 

 

4,291,335

 

Prepaid expenses and other current assets  

 

836,061

 

 

675,109

 

   
Total current assets  

 

14,335,430

 

 

33,120,422

 

   
Property and equipment, net  

 

8,286,005

 

 

8,175,872

 

Other assets  

 

174,471

 

 

249,543

 

   
Total assets  

$

22,795,906

 

$

41,545,837

 

   
LIABILITIES AND SHAREHOLDERS' EQUITY
   
Current liabilities  
Accounts payable  

$

1,054,409

 

$

790,892

 

Dividend payable  

 

-

 

 

11,180,900

 

Accrued expenses  

 

1,259,010

 

 

1,361,960

 

Contract liability  

 

92,072

 

 

313,365

 

   
Total current liabilities  

 

2,405,491

 

 

13,647,117

 

   
Non-current deferred income taxes  

 

129,689

 

 

129,689

 

Total liabilities  

 

2,535,180

 

 

13,776,806

 

   
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, 2021 and September 30, 2020  

$

-

 

$

-

 

   
Common stock, $.001 par value: 75,000,000 shares authorized, 19,338,323 and 19,310,835  
issued at March 31, 2021 and September 30, 2020, respectively  

 

19,338

 

 

19,311

 

   
Additional paid-in capital  

 

51,708,925

 

 

51,458,787

 

(Accumulated deficit)  

 

(10,099,000

)

 

(2,340,530

)

Treasury stock, at cost, 2,096,451 shares at March 31, 2021 and  
September 30, 2020  

 

(21,368,537

)

 

(21,368,537

)

   
Total shareholders' equity  

 

20,260,726

 

 

27,769,031

 

   
Total liabilities and shareholders' equity  

$

22,795,906

 

$

41,545,837

 

   
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations
(unaudited)
   
  Three months ended Six months ended
  March 31, March 31,
 

 

2021

 

2020

 

 

2021

 

2020

 

   
Net Sales  

 

5,121,845

 

4,835,065

 

 

9,991,497

 

9,346,493

 

   
Cost of sales  

 

2,218,854

 

2,539,894

 

 

4,522,683

 

4,449,675

 

   
Gross profit  

 

2,902,991

 

2,295,171

 

 

5,468,814

 

4,896,818

 

   
Operating expenses:  
Research and development  

 

689,654

 

712,019

 

 

1,289,952

 

1,378,634

 

Selling, general and administrative  

 

1,602,118

 

1,531,389

 

 

3,335,272

 

3,234,663

 

Total operating expenses  

 

2,291,772

 

2,243,408

 

 

4,625,224

 

4,613,297

 

   
Operating income  

 

611,219

 

51,763

 

 

843,590

 

283,521

 

   
Interest income  

 

152

 

65,721

 

 

1,031

 

144,591

 

Other income  

 

17,371

 

11,219

 

 

33,763

 

28,499

 

Income before income taxes  

 

628,742

 

128,703

 

 

878,384

 

456,611

 

   
Income tax expense (benefit)  

 

20,165

 

(309,402

)

 

29,662

 

(309,402

)

   
Net income  

$

608,577

$

438,105

 

$

848,722

$

766,013

 

   
Net income per common share:  
Basic  

$

0.04

$

0.03

 

$

0.05

$

0.05

 

Diluted  

$

0.04

$

0.03

 

$

0.05

$

0.04

 

   
Weighted average shares outstanding:  
Basic  

 

17,222,165

 

16,931,138

 

 

17,218,275

 

16,920,087

 

Diluted  

 

17,223,998

 

17,123,388

 

 

17,220,143

 

17,102,483