Innovative Solutions & Support, Inc. (“IS&S” or the
“Company”) (NASDAQ: ISSC) today announced its financial results for
the second quarter of fiscal 2016 ended March 31, 2016.
For the second quarter of fiscal 2016, the Company reported
sales of $8.7 million, compared to second quarter fiscal 2015 sales
of $5.3 million. Gross profit for the second quarter of 2016 was
$5.9 million, up over 270% from the same period a year ago
representing a gross margin of 68%. These increases are
attributable to both an increase in the proportion of product
revenue as well as the benefit of a reversal of liabilities(1)
recorded in the quarter. The Company reported second quarter 2016
net income of $1.6 million, or $0.09 per share, compared to a net
loss of $0.4 million, or $0.02 per share, in the second quarter a
year ago.
Geoffrey Hedrick, Chairman and Chief Executive Officer of
IS&S, said, “I am pleased to report strong quarterly earnings
as we achieved our second consecutive quarter of sequential revenue
growth. Our focus on increasing our mix of production revenue
continues to yield attractive gross margins, which remained at our
historical level of over 50%, after having first returned to those
levels last quarter. This helped drive a 273% increase in gross
profit, which was also aided by the reversal of certain liabilities
in the quarter. While our results benefitted from this adjustment,
its effect was diluted by the $800,000 increase in legal expenses
as well as a more than doubling of our investment in research and
development spending. The timing of new orders remain uneven, and I
would note that bookings for the first half of the current fiscal
year remain ahead of comparable production revenues. Book-and-ship
activity has also played a meaningful role in quarterly results
over the past 18 months, which we expect to continue. Finally, cash
flow generated added to our already strong financial condition. Our
performance over the first half of fiscal 2016 represents
significant progress against the challenges encountered a year ago.
Our goal is to build on the strategy that has enabled this rapid
recovery, through the continued focus on winning new production
contracts, the introduction of innovative new products and the
opening of new markets where our outstanding price-for-performance
value proposition can build value for our shareholders.”
New orders in the second quarter of fiscal 2016 were $3.0
million and backlog was $7.6 million at March 31, 2016, unchanged
from September 30, 2105. 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.
Six Months Results
Total sales for the six months ended March 31, 2016 were $15.2
million, compared to $12.0 million for the six months ended March
31, 2015. Gross profit for the first half of fiscal 2016 was $9.2
million(1), up 112% from the year ago period. Net income for the
six months ended March 31, 2016 was $1.4 million, or $0.08 per
share, compared to $0.2 million or $0.01 per share, over the first
half of fiscal 2015.
At March 31, 2016, the Company had $17.2 million of cash on
hand, up by approximately $0.9 million from September 30, 2015.
Cash provided by operating activities was $0.9 million for the
quarter.
Shahram Askarpour, President of IS&S, added, "Results in the
second quarter reflect the success of our efforts to more
aggressively market our existing portfolio of products, such as
iGNS, Standby Displays, and other enhancements. This increase in
production contracts for existing products with short lead times is
also helping grow our steady flow of routine book-and-ship
business. In addition, we are growing the content in many of our
newer products, which has led to larger orders. We still believe
international markets where we currently have only a small share,
such as Europe, the Middle East, and Asia, are markets with the
greatest growth potential, as these markets have been the source of
some of our recent new contract wins. And, with product margins
exceeding 50% in recent quarters, we believe we have right-sized
the organization for optimal efficiency, productivity and
performance. The significant increase in our research and
development commitment reflects our belief that we have the
opportunity to grow our business through internally developed new
products. By expanding our portfolio with products in
complementary, adjacent and new markets, we are continuing to
broaden our growth potential and increase the value of the
Innovative Solutions & Support franchise."
(1)In January 2016, the company renegotiated an agreement with a
customer whereby $1.3 million of 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 May 12, 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 8263998. 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 March 31, September 30,
2016 2015 (unaudited)
ASSETS
Current assets Cash and cash equivalents $ 17,207,882 $ 16,282,039
Accounts receivable 6,584,316 2,394,695 Unbilled receivables, net
1,725,273 3,920,209 Inventories 4,071,347 4,597,316 Deferred income
taxes 479,320 933,499 Prepaid expenses and other current assets
1,429,040 1,221,717 Total current assets 31,497,178
29,349,475 Property and equipment, net 6,943,414 7,095,330
Other assets 164,148 168,948 Total assets $
38,604,740 $ 36,613,753
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities Accounts payable $ 2,262,903 $ 1,435,981
Accrued expenses 2,582,274 2,568,531 Deferred revenue 342,001
756,745 Total current liabilities 5,187,178 4,761,257
Deferred income taxes 457,943 507,184 Other liabilities
2,865 2,826 Total liabilities 5,647,986
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
March 31, 2016 and September 30, 2015
- -
Common stock, $.001 par value: 75,000,000
shares authorized, 18,812,465 and 18,756, 089 issued at March 31,
2016 and September 30, 2015, respectively
18,813 18,756 Additional paid-in capital 51,400,058
51,148,722 Retained earnings 2,181,643 818,768
Treasury stock, at cost, 1,846,451 shares
at March 31, 2016 and September 30, 2015
(20,643,760 ) (20,643,760 ) Total
shareholders' equity 32,956,754 31,342,486
Total liabilities and shareholders' equity $
38,604,740 $ 36,613,753
Innovative Solutions and Support, Inc.
Consolidated Statements of Operations (unaudited)
Three months ended Six months ended March 31, March 31, 2016
2015 2016 2015 Net sales $ 8,660,982 $ 5,286,050 15,244,561
12,010,306 Cost of sales 2,757,635 3,702,654
6,025,403 7,665,105 Gross profit
5,903,347 1,583,396 9,219,158 4,345,201 Operating expenses:
Research and development 1,337,616 647,473 2,269,216 1,302,472
Selling, general and administrative
2,592,615 1,573,888 5,285,559
3,514,379 Total operating expenses 3,930,231 2,221,361
7,554,775 4,816,851 Operating income (loss) 1,973,116
(637,965 ) 1,664,383 (471,650 ) Interest income 8,340 6,013
15,366 11,898 Other income 26,623 9,407
59,032 20,229 Income (loss) before income taxes
2,008,079 (622,545 ) 1,738,781 (439,523 ) Income tax expense
(benefit) 429,766 (258,454 ) 375,906
(669,174 ) Net income (loss) $ 1,578,313 $ (364,091 ) $
1,362,875 $ 229,651 Net income (loss) per common
share: Basic $ 0.09 $ (0.02 ) $ 0.08 $ 0.01 Diluted $ 0.09 $
(0.02 ) $ 0.08 $ 0.01 Weighted average shares
outstanding: Basic
16,925,719
16,925,028 16,917,679
16,940,377 Diluted
17,018,161 16,925,028
17,009,299 17,043,735
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160511006497/en/
Innovative Solutions & Support, Inc.Relland WinandChief
Financial Officer610-646-0350rwinand@innovative-ss.com
Innovative Solutions and... (NASDAQ:ISSC)
Historical Stock Chart
From Apr 2024 to May 2024
Innovative Solutions and... (NASDAQ:ISSC)
Historical Stock Chart
From May 2023 to May 2024