Innovative Solutions & Support, Inc. (“IS&S” or the
“Company”) (ISSC) today announced its financial results for the
third quarter of fiscal 2016 ended June 30, 2016.
For the third quarter of fiscal 2016, the Company reported total
revenues of $6.5 million, compared to third quarter fiscal 2015
total revenues of $4.9 million. Gross profit for the third quarter
of 2016 was $3.9 million, or more than double the same period a
year ago. Gross margin in the quarter was 60% as production
revenues were 50% higher than those of the comparable period a year
ago. The Company reported third quarter 2016 net income of
$227,000, or $0.01 per share, compared to a net loss of $3.5
million, or $0.21 per share, in the third quarter a year ago, of
which $3.3 million was attributable to a non-cash, valuation
allowance of the Company’s deferred tax assets.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
IS&S, said, “I am pleased to report another profitable quarter,
once again largely due to an increasing proportion of higher margin
production revenue. Gross margins in the quarter were 60%, which
led to a doubling of gross profits in the quarter and helped
maintain gross margins at the 60% level through the first nine
months of this year. Similar to last quarter, the bottom line
reflects a significant increase in year-over-year legal expenses as
well as a strong commitment to internally fund research and
development, which reached nearly 22% of revenues this quarter.
Although new order activity has been uneven this year, orders are
up over 50%, revenues are up almost 30% and cash flows from
operations have improved by over 80% over the first nine months of
this fiscal year as compared to fiscal 2015. Book-and-ship activity
has played a meaningful role in quarterly results over the past 18
months, which, we expect to continue. We have never had a broader
set of products or richer set of relationships than we do now, all
of which we believe reflect our ability to deliver products that
meet the industry’s intense price-for-performance demands and will
drive top-line growth for the future. Financial results so far this
year show that we have succeeded in returning to growth this year
and that we will be entering the next fiscal year in an even
stronger position.”
At June 30, 2016, the Company had $17.5 million of cash on hand,
up approximately $1.2 million from September 30, 2015. Cash
provided by operating activities was $0.7 million for the quarter.
Cash balances also reflect the use of $170,000 to repurchase shares
during the quarter.
New orders in the third quarter of fiscal 2016 were $5.3
million, and backlog was $6.4 million at June 30, 2016. Backlog
excludes potential future production orders from products in
development under the Company’s engineering development contracts,
including the Pilatus PC-24 and the KC-46A, which the Company
expects to remain in production for a decade following completion
of their respective development phases. The Company expects that
these contracts will add to production sales already in
backlog.
Nine Months Results
Total sales for the nine months ended June 30, 2016 were $21.7
million, an increase of 28%, compared to $16.9 million for the nine
months ended June 30, 2015. Gross profit for the first nine months
of fiscal 2016 was $13.1 million(1), up 109% from the year ago
period. Net income for the nine months ended June 30, 2016 was $1.6
million, or $0.09 per share, compared to a loss of $3.3 million, or
$0.20 per share, over the first three quarters of fiscal 2015.
Shahram Askarpour, President of IS&S, added, "Over the first
three quarters of fiscal 2016 we have made significant progress in
our strategy to broaden our product offering with more
internally-developed solutions and to further diversify our
customer base, both domestically and internationally. We have also
effectively transitioned to primarily production revenues, a driver
of significantly better gross margins and one of our key strategic
imperatives. With an established and growing base of owners and
operators who have successfully implemented an IS&S solution,
we are seeing an increase in repeat business from these customers
as they look to further upgrade their fleets. This is leading to a
steady cadence of book-and-ship production order flow. By
internally developing a range of new products targeting the NexGen
mandate, such as Autothrottle and IGNS, we have a growing portfolio
of products that can be adapted to many different aircraft with a
minimal investment in additional engineering time or expense,
thereby increasing our versatility and expanding our market
opportunity. We remain focused on continuous product improvement
and innovation, and believe that the progress achieved this year
has us on track to continue to build value for our shareholders
over the long-term."
(1)In January 2016, the company renegotiated an agreement with a
customer whereby $1.3 million of an unbilled receivable and our
obligations associated with certain product levels were canceled.
The bad debt expense related to the impairment of the unbilled
receivable was previously recognized in the company's September 30,
2015 audited financial statements. In addition, as a result of the
changes to the agreement, we recognized an approximately $1.2
million positive impact to the statement of operations in the
second quarter resulting from a reversal of $1.2 million in
associated liabilities consisting of deferred revenue and a
contract loss accrual.
Conference Call
The Company will be hosting a conference call on Thursday,
August 11, 2016 at 10:00 a.m. EDT to discuss these results and its
business outlook. Please use the following dial in number to
register your name and company affiliation for the conference call:
877-883-0383 and enter the PIN Number 1647056. 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) 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,
2016 2015 (unaudited)
ASSETS
Current assets Cash and cash equivalents $ 17,530,210 $ 16,282,039
Accounts receivable 5,838,818 2,394,695 Unbilled receivables, net
1,611,357 3,920,209 Inventories 4,008,114 4,597,316 Deferred income
taxes 741,109 933,499 Prepaid expenses and other current assets
1,136,268 1,221,717 Total current assets 30,865,876
29,349,475 Property and equipment, net 7,014,638 7,095,330
Other assets 156,948 168,948 Total assets $
38,037,462 $ 36,613,753
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 1,849,274 $ 1,435,981
Accrued expenses 2,295,897 2,568,531 Deferred revenue 299,052
756,745 Total current liabilities 4,444,223 4,761,257
Deferred income taxes 576,629 507,184 Other liabilities
2,930 2,826 Total liabilities 5,023,782
5,271,267 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
June 30, 2016 and September 30, 2015
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,812,465 and 18,756, 089 issued at June 30,
2016 and September 30, 2015, respectively
18,813 18,756 Additional paid-in capital 51,400,058
51,148,722 Retained earnings 2,408,440 818,768
Treasury stock, at cost, 1,903,616 and
1,846,451 shares at June 30, 2016 and September 30, 2015,
respectively
(20,813,631 ) (20,643,760 ) Total
shareholders' equity 33,013,680 31,342,486
Total liabilities and shareholders' equity $
38,037,462 $ 36,613,753
Innovative
Solutions and Support, Inc. Consolidated Statements of
Operations (unaudited) Three
months ended Nine months ended June 30, June 30, 2016 2015 2016
2015 Net sales $ 6,504,592 $ 4,919,689 21,749,152 16,929,995
Cost of sales 2,621,016 2,988,044
8,646,419 10,653,149 Gross profit
3,883,576 1,931,645 13,102,733 6,276,846 Operating expenses:
Research and development 1,405,158 799,340 3,674,374 2,101,812
Selling, general and administrative 2,246,074
1,397,165 7,531,633 4,911,546 Total
operating expenses 3,651,232 2,196,505 11,206,007 7,013,358
Operating income (loss) 232,344 (264,860 ) 1,896,726 (736,512 )
Interest income 9,092 6,372 24,458 18,269 Other income
12,457 11,173 71,490 31,405
Income (loss) before income taxes 253,893 (247,315 )
1,992,674 (686,838 ) Income tax expense 27,096
3,284,658 403,002 2,615,484 Net
income (loss) $ 226,797 $ (3,531,973 ) $ 1,589,672 $ (3,302,322 )
Net income (loss) per common share: Basic $ 0.01 $ (0.21 ) $
0.09 $ (0.20 ) Diluted $ 0.01 $ (0.21 ) $ 0.09 $ (0.20 )
Weighted average shares outstanding: Basic
16,941,707 16,910,475
16,925,688 16,930,522
Diluted
17,059,546
16,910,475 17,027,216
16,930,522
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160810006093/en/
Innovative Solutions & Support, Inc.Relland WinandChief
Financial Officer610-646-0350rwinand@innovative-ss.com
Innovative Solutions and... (NASDAQ:ISSC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Innovative Solutions and... (NASDAQ:ISSC)
Historical Stock Chart
From Sep 2023 to Sep 2024