Innovative Solutions & Support, Inc. (“IS&S” or the
“Company”) (ISSC) today announced its financial results for the
third quarter of fiscal 2018, ended June 30, 2018.
For the third quarter of fiscal 2018, the Company reported net
sales of $3.4 million, compared to third quarter fiscal 2017 sales
of $4.5 million. The Company reported a net loss of $1.0 million,
or ($0.06) per share, for the third quarter of 2018 compared to net
income of $19,000, or $0.00 per share, in the third quarter a year
ago. In the third quarter a year ago, the Company recorded a
$537,000 tax benefit related to a change in the anticipated
profitability in the year, while there was no similar benefit in
this year’s third quarter.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
IS&S, said, “In the third quarter we took action to more
clearly focus the organization on those programs that we believe to
be critical and represent the greatest sales potential. Among the
programs in which we have the greatest confidence, we believe, is
our Autothrottle technology, an innovative breakthrough in
turboprop cockpit technology. With PC-12 certification in hand, we
are pursuing a second STC, for the King Air. This quarter we
purchased our own King Air aircraft, providing unfettered access to
an aircraft in an effort to help expedite certification. To support
these programs, we reorganized certain aspects of the business and
revamped our sales and marketing strategy. In addition, the Company
undertook a reduction in workforce. The goal of these actions was
to concentrate our resources around what we believe to be our
critical programs and reduce our operating expenses. We believe
that we are a stronger organization, more efficient, and more
focused on opportunities that have the greatest potential to unlock
the value inherent in our innovative technology.”
At June 30, 2018, the Company had $20.9 million of cash on hand.
The Company used $2.4 million of cash to acquire a King Air
airplane in the quarter.
The Company recorded a $259,000 charge in the third quarter as a
result of a reduction in workforce/reorganization. Beginning in
fiscal 2019, the Company currently expects to realize a savings of
$3.5 million on an annual basis in payroll and related costs
compared to historical levels and currently expects research and
development costs will decrease to 20% of current net sales which
is approaching a more historical ratio than the 30% of current net
sales seen in recent periods.
New orders in the third quarter of fiscal 2018 were $3.6 million
and backlog as of June 30, 2018 was $4.0 million. Backlog excludes
potential future sole-source production orders from the Pilatus
PC-24, and the KC-46A, all of 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.
Shahram Askarpour, President of IS&S, added, "During the
third quarter we continued to advance our AutoThrottle technology
for the King Air aircraft, for which we are working on a new
certification. A flight test with the FAA is scheduled in August
which we currently expect will ultimately result in certification
of our ThrustSense® AutoThrottle for that platform. We believe
IS&S is now a leaner and more focused organization that boasts
a portfolio of the some of the industry’s best
price-for-performance technology that targets opportunities in the
commercial air transport, military and general aviation
markets.”
Nine Months Results
Total net sales for the nine months ended June 30, 2018 were
$10.2 million, compared to $12.6 million for the nine months ended
June 30, 2017. For the nine months ended June 30, 2018, the net
loss was ($3.2) million compared to net income of $4.8 million for
the first nine months of fiscal 2017. Nine month results for fiscal
2017 include the benefit of a $3.6 million reduction to selling,
general and administrative expenses as well as $4.1 million of
other income, both arising from the settlement of a lawsuit.
Conference Call
The Company will be hosting a conference call on Thursday,
August 9, 2018 at 10:00 a.m. ET 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 8271296. 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.
TABLES TO FOLLOW
Innovative Solutions and Support, Inc.
Consolidated Balance Sheets June 30, September
30, 2018 2017 (unaudited)
ASSETS
Current assets Cash and cash equivalents $ 20,879,412 $ 24,680,301
Accounts receivable 1,780,829 2,748,597 Unbilled receivables
1,039,879 1,480,822 Inventories 4,685,652 4,179,654 Prepaid
expenses and other current assets 874,375 1,092,064
Total current assets 29,260,147 34,181,438 Property and
equipment, net 8,890,643 6,669,011 Other assets 184,026 187,315
Total assets $ 38,334,816 $ 41,037,764
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 1,329,859 $ 1,321,251
Accrued expenses 1,899,774 1,760,037 Deferred revenue 406,748
280,354 Total current liabilities 3,636,381 3,361,642
Non-current deferred income taxes 129,587 67,742
Total liabilities 3,765,968 3,429,384
Commitments and contingencies (See Note 6)
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, 2018 and September 30, 2017
$ - $ -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,937,050 and 18,879,580 issued at June 30,
2018 and September 30, 2017, respectively
18,937 18,880 Additional paid-in capital 51,783,779
51,583,841 Retained earnings 4,134,669 7,374,196
Treasury stock, at cost, 2,096,451 shares
at June 30, 2018 and September 30, 2017
(21,368,537 ) (21,368,537 ) Total shareholders'
equity 34,568,848 37,608,380 Total liabilities and
shareholders' equity $ 38,334,816 $ 41,037,764
Innovative Solutions and Support,
Inc. Consolidated Statements of Operations
(unaudited) Three months ended Nine months ended June
30, June 30, 2018 2017 2018 2017 Gross sales $ 3,389,663 $
4,541,421 $ 10,204,851 $ 13,117,200 Returns and allowances -
- - (556,009 ) Net Sales
3,389,663 4,541,421 10,204,851 12,561,191 Cost of sales
1,806,980 2,164,140 5,482,596
6,294,623 Gross profit 1,582,683
2,377,281 4,722,255 6,266,568 Operating expenses: Research
and development 1,028,271 1,236,184 2,983,614 3,391,181 Selling,
general and administrative 1,626,640 1,682,286
5,005,941 2,025,952 Total
operating expenses 2,654,911 2,918,470 7,989,555 5,417,133
Operating (loss) income (1,072,228 ) (541,189 ) (3,267,300 )
849,435 Interest income 15,164 7,682 36,469 27,505 Other
income 16,128 15,628 53,224
4,174,953 (Loss) income before income taxes
(1,040,936 ) (517,879 ) (3,177,607 ) 5,051,893 Income tax
expense (benefit) 101 (537,099 ) 61,920
297,220 Net (loss) income $ (1,041,037
) $ 19,220 $ (3,239,527 ) $ 4,754,673 Net
(loss) income per common share: Basic $ (0.06 ) $ 0.00 $
(0.19 ) $ 0.28 Diluted $ (0.06 ) $ 0.00 $ (0.19 ) $
0.28 Weighted average shares outstanding: Basic
16,816,838
16,755,082 16,800,070
16,735,533 Diluted
16,816,838 16,870,404
16,800,070
16,847,305
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version on businesswire.com: https://www.businesswire.com/news/home/20180808005789/en/
Innovative Solutions & Support, Inc.Relland WinandChief
Financial Officer610-646-0350rwinand@innovative-ss.com
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