Innovative Solutions & Support, Inc. (“IS&S” or the
“Company”) (NASDAQ: ISSC) today announced its financial results for
the fourth quarter and full fiscal year 2023, which ended September
30, 2023.
For the fourth quarter of fiscal 2023, IS&S reported net
sales of $13 million, up 79% from $7.3 million in the fourth
quarter a year ago. The Company reported net income of $2.6
million, or $0.15 per share, increases of 63% and 67%,
respectively, compared to $1.6 million, or $0.09 per share, in the
fourth quarter of fiscal 2022.
Gross profit in the fourth quarter of 2023 was $8.1 million, or
62% of sales, compared to $4.5 million, also 62% of sales in the
fourth quarter of 2022.
The increase in sales and earnings in the fourth quarter of 2023
primarily reflects the impact of the previously announced addition
of the product lines acquired from Honeywell International, Inc.
(“Honeywell”) pursuant to an exclusive license and asset
acquisition that closed in the third quarter of 2023.
Shahram Askarpour, Chief Executive Officer of IS&S, said, “I
am pleased to report our fifth consecutive year of both top and
bottom-line growth as a result of one of the best quarters in the
Company’s recent history. The results include some
customer-directed accelerated shipments of the acquired Honeywell
products to mitigate any impacts from potential delivery delays
over the next two quarters as equipment and inventory are
transferred to IS&S. The ongoing integration of the Honeywell
product lines is proceeding well, and we remain confident that
annualized revenues will increase by approximately 40% from
pre-acquisition levels once operations have been fully integrated
in fiscal 2024. The integration of the Honeywell product lines
enhances our current product offerings in the Air Transport,
Military and Business Aviation Markets and has provided us with an
introduction to numerous operators with whom we did not previously
have relationships, thereby opening a large new market opportunity
for our other products.”
For the fiscal year 2023, the Company generated $2.1 million of
cash flow from operations. The Company had $3.1 million of cash on
hand as of September 30, 2023, which has increased during the
quarter ended December 31, 2023 because of the collection of
receivables and the sale of the Company’s King Air aircraft. As of
December 19, 2023 the Company’s cash on hand is currently over $8
million.
New orders in the fourth quarter of fiscal 2023 were
approximately $12.7 million and were $36.5 million for the full
fiscal 2023 year. Backlog as of September 30, 2023, was $13.5
million. Only purchase orders in hand are included in our sales
backlog, which primarily consists of orders from our OEM customers
that have long-term programs-- Pilatus PC-24, Textron King Air,
Boeing T-7 Red Hawk and the Boeing KC-46A. IS&S expects these
programs to remain in production for approximately a decade and
anticipates that they will continue to generate future sales. Due
to their nature, the products licensed from Honeywell do not
typically enter into backlog.
Full Year Fiscal 2023
Results
Total revenues for the fiscal year ended September 30, 2023,
were $34.8 million, up 26% from $27.7 million for the fiscal year
ended September 30, 2022. Net income for fiscal 2023 was $6.0
million, or $0.35 per share, compared to $5.5 million, or $0.32 per
share, in fiscal 2022. Net income in fiscal 2022 included a $1.1
million gain on the sale of an asset.
Conference Call
The Company will be hosting a conference call on Thursday,
December 21, 2023 at 10:00 AM 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: 844-739-3798 and ask to join
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.
FORWARD LOOKING STATEMENT
DISCLAIMER
In addition to the historical information contained herein, this
press release contains “forward-looking statements” within the
meaning of, and intended to be covered by, the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are based on management’s current
expectations and beliefs concerning future developments and their
potential effects on the Company including, without limitation,
statements about future revenue, financial performance and
profitability, future business opportunities, , the integration of
the Honeywell product lines, including how the product lines
enhance our current product offerings in the Air Transport,
Military and Business Aviation Markets and have provided us with an
introduction to numerous operators with whom we did not previously
have a relationship, creating a large new market for many of our
other products, the impact of licenses, including the Honeywell
license, and the timing of our long-term programs remaining in
production and expectations regarding a large new market
opportunity for our other products. Forward-looking statements are
subject to numerous assumptions, risks and uncertainties, which
change over time. Forward-looking statements speak only as of the
date they are made. Because forward-looking statements are subject
to assumptions, 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, the Company’s ability to
efficiently integrate acquired and licensed product lines,
including the Honeywell product lines, into its operations; a
reduction in anticipated orders; an economic downturn; changes in
the competitive marketplace and/or customer requirements; an
inability to perform customer contracts at anticipated cost levels;
and other factors that generally affect the economic and business
environments in which the Company operates. Such factors are
detailed in the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 2022, and subsequent reports filed 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. 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 (unaudited) September 30,
September 30,
2023
2022
ASSETS Current assets Cash and cash
equivalents
$
3,097,193
$
17,250,546
Accounts receivable
9,743,714
4,297,457
Contract asset
487,139
162,742
Inventories
6,139,713
5,349,104
Prepaid inventory
12,069,114
-
Prepaid expenses and other current assets
1,073,012
1,142,470
Asset held for sale
2,063,818
-
Total current assets
34,673,703
28,202,319
Goodwill
3,557,886
-
Intangible assets, net
16,185,321
60,348
Property and equipment, net
7,892,427
6,292,189
Deferred income taxes
456,392
46,487
Other assets
191,722
103,980
Total assets
$
62,957,451
$
34,705,323
LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities Current portion of
long-term debt
$
2,000,000
$
-
Accounts payable
1,337,275
708,845
Accrued expenses
2,918,325
2,972,275
Contract liability
143,359
259,183
Total current liabilities
6,398,959
3,940,303
Long-term debt
17,500,000
-
Other liabilities
421,508
15,065
Total liabilities
24,320,467
3,955,368
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 September 30, 2021 and 2020
-
-
Common stock, $.001 par value: 75,000,000 shares authorized,
19,543,441 and 19,412,664 issued at September 30, 2023 and 2022,
respectively
19,543
19,413
Additional paid-in capital
54,317,265
52,458,121
Retained earnings (accumulated deficit)
5,668,713
(359,042
)
Treasury stock, at cost, 2,096,451 shares at September 30, 2023 and
at September 30, 2022
(21,368,537
)
(21,368,537
)
Total shareholders' equity
38,636,984
30,749,955
Total liabilities and shareholders' equity
$
62,957,451
$
34,705,323
Innovative Solutions and Support, Inc. Consolidated
Statements of Operations (unaudited) Three months
ended Twelve months ended September 30, September 30,
2023
2022
2023
2022
Sales
$
12,992,596
$
7,263,121
$
34,808,513
$
27,740,695
Cost of sales
4,880,125
2,795,585
13,497,442
11,066,314
Gross profit
8,112,471
4,467,536
21,311,071
16,674,381
Operating expenses: Research and development
741,579
642,303
3,129,518
2,705,140
Selling, general and administrative
3,718,293
1,527,900
10,822,505
6,753,915
Total operating expenses
4,459,872
2,170,203
13,952,023
9,459,055
Operating income
3,652,599
2,297,333
7,359,048
7,215,326
Interest (expense)
(393,281
)
-
(393,281
)
-
Interest income
85,693
50,179
518,188
61,051
Other income
19,813
15,931
151,317
65,232
Income before income taxes
3,364,824
2,363,443
7,635,272
7,341,609
Income tax expense
730,202
761,468
1,607,517
1,817,831
Net income
$
2,634,622
$
1,601,975
$
6,027,755
$
5,523,778
Net income per common share: Basic
$
0.15
$
0.09
$
0.35
$
0.32
Diluted
$
0.15
$
0.09
$
0.35
$
0.32
Weighted average shares outstanding: Basic
17,400,659
17,256,750
17,411,684
17,256,750
Diluted
17,451,314
17,257,871
17,427,278
17,257,871
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version on businesswire.com: https://www.businesswire.com/news/home/20231220435820/en/
Rell Winand – CFO 610-646-9800 X550
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