Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today
announced its financial results for the fiscal 2011 third quarter
ending June 30, 2011.
For the third quarter, the Company reported revenue of $6.0
million. Gross margins in the quarter were a strong 52.9%. For the
quarter, the Company had a modest operating loss and a net loss of
($78,980) or $0.00 per fully diluted share. Cash flow from
operations in the quarter was $0.2 million. For the third quarter
of 2010, the Company reported revenues of $7.8 million and net
income of $1.4 million, or $0.08 per diluted share.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
Innovative Solutions & Support, Inc. said, “Results in the
quarter reflect a continued high level of investment in product
development and a steady operating performance in a very
challenging and uneven market, demonstrating the strength of our
strategy to build products capable of serving the general aviation,
military/defense and commercial air transport markets. Through the
first nine months of the year, we have not only grown revenues and
improved overall financial performance, but also have made
significant progress introducing new products and adding new
customers. Our resilient and flexible organization has enabled us
to strike a balance between the need to maintain financial
discipline in the near term while simultaneously investing to
strengthen our product portfolio and improve our competitive
position. Margins remain healthy. Research and development
investment levels have been maintained to further advance our
technology. Despite the continuing weakness in some of our end
markets and delays in contract awards, we are seeing an improvement
in order intake. Our order book grew in the quarter and order
intake for the quarter was almost equal to that of the first two
quarters combined. We are confident that the introduction of our
Flight Management System and the opening of the B737 market are
indicative of the growing interest in the innovative technical
approaches that have characterized our Company’s products and will
contribute to long term revenue growth. We will discuss new orders
more fully in our conference call tomorrow.”
The Company continues to have a strong balance sheet with cash
of $42.6 million and virtually no debt as of June 30, 2011. Backlog
was approximately $27 million at the end of the third quarter, up
from approximately $25 million at March 2011. The backlog is
comprised of a wider base of customers and broader set of
products.
Nine Month Results
Revenues were $19.2 million for the first three quarters of
2011, up from $17.8 million for the nine months ended June 30,
2010. For the nine months ended June 30, 2011, net income was
$704,952 or $0.04 per share compared to a net loss of ($502,906) or
($0.03) per fully diluted share for the nine months ended June 30,
2010. Cash flow from operations was $1.9 million for the nine
months ended June 30, 2011 compared to $2.6 million for the prior
year comparable period.
Roman Ptakowski, President of ISSC, added, “Recent new contracts
with BAE, Boeing for the KC-46A Air Force Tanker and our first B737
retrofit illustrate the growing market opportunities resulting from
new product development and marketing strategy. IS&S now has
400 B757/B767 aircraft flat panel display retrofits installed or
under contract. We are leveraging this experience to penetrate the
over 1000 aircraft in the B737 classic market. With the very strong
sales of the Company’s recently certified FMS product to Eclipse
Aircraft owners, we have tapped a market eager to accept the
exceptional values of our Company’s product. Strategically, we seek
to expand into new markets where we can leverage our low-cost,
high-quality technology and to broaden our product portfolio. As
the economy rebounds, we expect our recent successes to attract
greater market interest.”
Business Outlook
We expect the fourth quarter to be profitable and to generate
positive operating cash flow, which will result in a second
consecutive full year of profitability. Our ability to provide
specific targets and ranges remains difficult as a result of the
current economic climate. We will provide additional commentary
during our earnings conference call.
The Company will be hosting a conference call Thursday, July 28,
2011 at 10:00 AM 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: 877-718-5092.
The conference ID# is 6944024. 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, Pennsylvania, Innovative Solutions &
Support, Inc. (www.innovative-ss.com) is a systems integrator
engaged in the design, manufacture and marketing of Flat Panel
Display Systems, Flight Management Systems, Air Data equipment,
Flight Information Computers, Engine and Fuel Measurement and
Control Computers, and advanced monitoring systems that measure and
display critical flight information. This includes data relative to
aircraft separation, airspeed and altitude as well as fuel and
instrument measurements.
Certain matters contained herein 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 reflects 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 Statement of Operations (unaudited)
Three months ended
Nine months ended June 30 June 30 2011
2010 2011 2010 Sales $ 5,971,494 $
7,813,816 19,247,375 17,794,012 Cost of Sales
2,811,960 3,010,810 8,621,029
8,790,079 Gross Profit 3,159,534 4,803,006
10,626,346 9,003,933 Operating expenses: Research and
development 1,408,794 1,274,872 4,319,228 3,844,282 Selling,
general and administrative 1,855,675 1,938,411
5,794,167 5,965,876 Total
operating expenses 3,264,469 3,213,283 10,113,395 9,810,158
Operating (loss) income (104,935 ) 1,589,723 512,951 (806,225 )
Interest income 26,885 69,164 119,740 119,774 Interest
expense (350 ) (562 ) (1,212 ) (1,840 ) Other income 7
- 150,010 50,000
(Loss) income before income taxes (78,393 ) 1,658,325
781,489 (638,291 ) Income tax (benefit) expense 588
270,293 76,538 (135,385 )
Net (loss) income $ (78,981 ) $ 1,388,032 $ 704,951
$ (502,906 ) Net (loss) income per Common Share Basic
$ (0.00 ) $ 0.08 $ 0.04 $ (0.03 ) Diluted $ (0.00 ) $
0.08 $ 0.04 $ (0.03 ) Weighted Average Shares
Outstanding Basic 16,793,529 16,760,759 16,793,529 16,752,973
Diluted 16,793,529 16,799,157 16,839,817 16,752,973
Innovative Solutions and Support, Inc. Condensed
Consolidated Balance Sheet (unaudited)
June 30, September 30, 2011 2010
ASSETS
Current Assets Cash and cash equivalents $ 42,581,389 $ 40,916,346
Accounts receivable, net 3,064,685 2,529,976 Inventories 4,376,978
4,656,392 Deferred income taxes 418,853 522,352 Prepaid expenses
and other current assets 648,664 982,768
Total current assets 51,090,569 49,607,834
Property and equipment, net 7,557,379 7,761,538 Other assets
243,517 221,150 Total Assets $
58,891,465 $ 57,590,522
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities Current portion of capitalized lease
obligations $ 9,908 $ 9,908 Accounts payable 1,091,482 543,877
Accrued expenses 2,288,975 2,585,060 Deferred revenue
336,410 157,933 Total current
liabilities 3,726,775 3,296,778 Long-term portion of
capitalized lease obligations 6,431 15,560 Deferred revenue - 8,688
Deferred income taxes 546,993 649,929 Other liabilities
175,600 151,530 Total Liabilities
4,455,799 4,122,485 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, 2011 and September 30, 2010
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,276,039 and 18,244,701 issued at June 30,
2011 and September 30, 2010
18,276 18,245 Additional paid-in capital 47,094,292
46,831,646 Retained earnings 26,614,604 25,909,652
Treasury stock, at cost, 1,482,510 shares
at June 30, 2011 and September 30, 2010
(19,291,506 ) (19,291,506 ) Total
Shareholders' Equity 54,435,666 53,468,037
Total Liabilities and Shareholders' Equity $
58,891,465 $ 57,590,522
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