Innovative Solutions & Support, Inc. (NASDAQ: ISSC) today
announced its financial results for the first quarter of fiscal
2012, ending December 31, 2011.
Net revenues for the first quarter of fiscal 2012 were $4.8
million, compared to $6.5 million in the first quarter of fiscal
2011. The Company reported a fiscal first quarter 2012 loss of
$343,000 or ($0.02) per fully diluted share, compared to net income
of $285,000, or $0.02 per fully diluted share, in the same quarter
a year ago. The company generated $622,000 of cash flow from
operations in the first quarter of fiscal 2012.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
Innovative Solutions & Support, Inc., said, “In the first
quarter, deliveries were impacted temporarily by pricing
renegotiations. That said, we generated positive cash flow and
achieved significant progress on our customer funded engineering
modification and development (EMD) projects. Those projects
represent opportunities to expand our product portfolio and to
increase our addressable market. In addition to the programs under
contract entering the quarter, EMD revenues included also two new
contracts signed during the quarter, both of which will lead to OEM
production, one for an advanced avionics suite for the Eclipse E550
aircraft and the other for a flight information computer - a new
program arising out of our ability to leverage the technology of
our flat panel display systems and related avionics into a broader
product offering. Our fiscal 2012 represents an important
transition year. We are focused intently on delivering these
development contracts on time, on budget and at the same high level
of quality for which we are respected, so that we will have a set
of new products that address these large and expanding
markets.”
For the first quarter of fiscal 2012, the Company generated over
$600,000 of positive operating cash flow. At December 31, 2011, the
Company had $42.8 million of cash on hand, an increase from the
$42.6 million of cash at September 30, 2011. The Company remains
free of long-term debt. Cash at December 31, 2011 is net of
approximately $350,000 used during the first quarter to repurchase
Company stock. Backlog was approximately $25.7 million at December
31, 2011 compared to $27.5 million at September 30, 2011. Backlog
continues to reflect the engineering value of the new products
currently under development, but does not include the prospective
production value associated with many of these programs.
At the end of the quarter, the Company had $902,000 due from
American Airlines, Inc. of which $760,000 relates to sales prior to
bankruptcy. Based upon the present status of the bankruptcy
proceeding, we are not able to determine the amount, if any, that
would be uncollectible.
Roman Ptakowski, President of the Company, added, “During the
quarter our EMD efforts were focused upon accelerating and
capitalizing on the growth opportunities represented by the
customer-funded projects. Over the quarter, we made progress on all
the major new platforms currently in development, including the
aerial refueling operator control and display unit for the KC46A
tanker, the complete systems integration and CNS/ATM avionics
upgrade for the B737-400 aircraft, the Advanced Avionics Suite for
the OEM production Eclipse E550 aircraft, and an advanced flight
information computer.
The combination of near term orders and engineering investment
for future opportunities is setting the stage for a period of
steady growth as new product introductions build on our solid
foundation of highly-reliable and cost-effective technology.”
Business Outlook
For the fiscal year ending September 30, 2012, the Company
continues to expect revenues to increase modestly relative to
fiscal 2011, notwithstanding potential disruptions from the current
uncertain market conditions. The Company’s new product and expanded
platform initiatives are expected to increase the proportion of
revenues and margins from EMD sales in fiscal 2012. The Company’s
ability to provide specific targets and ranges remains difficult as
a result of the current economic climate. Management will provide
additional commentary during the earnings conference call.
Conference Call
The Company will be hosting a conference call January 26, 2012
at 10:00 a.m. EST time 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: 888-339-3401.
The conference ID# is 5958846. 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 engaged in the
design, manufacture and marketing of Flat Panel Display 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 critical engine parameters.
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 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 Balance Sheet (unaudited)
December 31, September 30, 2011 2011
ASSETS
Current Assets Cash and cash equivalents $ 42,783,639 $ 42,625,854
Accounts receivable, net 2,560,402 3,124,114 Inventories 4,143,521
3,508,595 Deferred income taxes 435,872 438,635 Prepaid expenses
and other current assets 980,836 875,636
Total current assets 50,904,270 50,572,834
Property and equipment, net 7,463,211 7,476,362 Other assets
166,400 208,408 Total Assets $
58,533,881 $ 58,257,604
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities Current portion of capitalized lease
obligations $ 9,980 $ 13,189 Accounts payable 1,027,020 443,516
Accrued expenses 2,238,621 2,551,389 Deferred revenue
917,920 232,630 Total current
liabilities 4,193,541 3,240,724 Deferred income taxes
564,367 566,963 Other liabilities 68,004
189,130 Total Liabilities 4,825,912
3,996,817 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
December 31, 2011 and September 30, 2011
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,297,734 and 18,286,884 issued at December 31,
2011 and September 30, 2011, respectively
18,298 18,287 Additional paid-in capital 47,345,531
47,206,690 Retained earnings 26,283,263 26,626,242
Treasury stock, at cost, 1,633,426 and
1,544,910 shares at December 31, 2011 and September 30, 2011,
respectively
(19,939,123 ) (19,590,432 ) Total
Shareholders' Equity 53,707,969 54,260,787
Total Liabilities and Shareholders' Equity $
58,533,881 $ 58,257,604
Innovative
Solutions and Support, Inc. Consolidated Statement of
Operations (unaudited) Three months ended
December 31, 2011 2010 Sales $
4,755,459 $ 6,529,811 Cost of Sales 2,629,860
2,935,655 Gross Profit 2,125,599 3,594,156
Operating expenses: Research and development 790,223
1,353,607 Selling, general and administrative 1,993,575
2,089,349 Total operating expenses 2,783,798
3,442,956 Operating (loss) income (658,199 ) 151,200
Interest income 21,779 47,592 Interest expense (237 ) (458 ) Other
income 42,069 150,003 (Loss)
income before income taxes (594,588 ) 348,337 Income tax
(benefit) expense (251,609 ) 63,557 Net
(loss) income $ (342,979 ) $ 284,780 Net (loss)
income per Common Share Basic $ (0.02 ) $ 0.02 Diluted $
(0.02 ) $ 0.02 Weighted Average Shares Outstanding
Basic 16,721,494 16,770,415 Diluted 16,721,494 16,810,278
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