Innovative Solutions & Support, Inc. Announces Significant Increase in Second Quarter Fiscal 2022 Revenues and Earnings

EXTON, Pa.--()--Innovative Solutions & Support, Inc. (“IS&S” or the “Company”) (NASDAQ: ISSC) today announced its financial results for the second quarter and first six months of fiscal year 2022, which ended March 31, 2022.

For the second quarter of fiscal 2022, the Company reported net sales of $6.8 million, up 34% as compared to $5.1 million in the second quarter a year ago. The Company reported a 135% increase in net income to $1.4 million, or $0.08 per share, compared to the second quarter of fiscal 2021.

Shahram Askarpour, Chief Executive Officer, said, “The second quarter builds on our solid start to the year, with 34% revenue growth compared to the year ago quarter and second quarter gross margin expanding to 61%, our highest gross margin in six years. With operating expenses little changed from a year ago, this led to a 135% increase in net income and $1.9 million in positive cash flow, further strengthening our financial position.”

Mr. Askarpour added, “Our results reflect the strength of our long-term contracts with some of the world’s most respected OEMs, our position as a leader in supplying flat panel displays to the air cargo market and an overall firming in some of our end markets. As a result, orders in the quarter were up significantly from the first quarter and we grew our backlog.”

Cash Flow, New Orders and Backlog

The Company’s cash on hand increased to $11.6 million at March 31, 2022, from $8.3 million at the end the latest fiscal year end. Net cash flows from operating activities were $1.9 million in the second quarter.

New orders in the second quarter of fiscal 2022 were approximately $8.2 million and backlog as of March 31, 2022, was $7.5 million. Backlog increased from $6.2 million at the end of the first quarter of fiscal 2022. Backlog excludes potential future sole-source production orders from the Pilatus PC-24, Textron King Air and the KC-46A programs, which the Company expects to remain in production for a decade. 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, 2022, were $13.5 million compared to $10.0 million for the six months ended March 31, 2021. For the six months ended March 31, 2022, the company reported net income of $2.6 million, or $0.15 per share, up from $849,000, or $0.05 per share for the first half of fiscal 2021.

Conference Call

The Company will be hosting a conference call on Thursday, May 12, 2022, at 10:00 a.m. 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: 877-270-2148 and ask to be joined into 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.

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 Sheets
 

March 31,

September 30,

2022

2021

(unaudited)

ASSETS
Current assets
Cash and cash equivalents

$

11,618,840

 

$

8,265,606

 

Accounts receivable

 

4,055,692

 

 

4,046,337

 

Inventories

 

4,689,261

 

 

4,545,392

 

Prepaid expenses and other current assets

 

878,031

 

 

833,076

 

 
Total current assets

 

21,241,824

 

 

17,690,411

 

 
Property and equipment, net

 

8,047,346

 

 

8,143,483

 

Deferred income taxes

 

536,681

 

 

1,063,822

 

Other assets

 

173,409

 

 

188,284

 

 
Total assets

$

29,999,260

 

$

27,086,000

 

 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities
Accounts payable

$

744,692

 

$

623,620

 

Accrued expenses

 

1,558,161

 

 

1,431,115

 

Contract liability

 

276,728

 

 

417,504

 

 
Total current liabilities

 

2,579,581

 

 

2,472,239

 

 
Other liabilities

 

21,790

 

 

28,680

 

Total liabilities

 

2,601,371

 

 

2,500,919

 

 
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, 2022 and September 30, 2021 $

-

$

-

 
Common stock, $.001 par value: 75,000,000 shares authorized, 19,368,219 and 19,342,823 issued at March 31, 2022 and September 30, 2021 19,368 19,343
 
Additional paid-in capital

 

52,067,250

 

 

51,817,095

 

(Accumulated deficit)

 

(3,320,192

)

 

(5,882,820

)

Treasury stock, at cost, 2,096,451 shares at March 31, 2022 and September 30, 2021

 

(21,368,537

)

 

(21,368,537

)

 
Total shareholders' equity

 

27,397,889

 

 

24,585,081

 

 
Total liabilities and shareholders' equity

$

29,999,260

 

$

27,086,000

 

Innovative Solutions and Support, Inc.
Consolidated Statements of Operations
(unaudited)
 
Three months ended Six months ended
March 31, March 31,

2022

2021

2022

2021

 
Net sales

$

6,845,820

$

5,121,845

$

13,541,598

$

9,991,497

 
Cost of sales

 

2,663,210

 

2,218,854

 

5,391,267

 

4,522,683

 
Gross profit

 

4,182,610

 

2,902,991

 

8,150,331

 

5,468,814

 
Operating expenses:
Research and development

 

650,031

 

689,654

 

1,386,556

 

1,289,952

Selling, general and administrative

 

1,724,800

 

1,602,118

 

3,531,782

 

3,335,272

Total operating expenses

 

2,374,831

 

2,291,772

 

4,918,338

 

4,625,224

 
Operating income

 

1,807,779

 

611,219

 

3,231,993

 

843,590

 
Interest income

 

346

 

152

 

442

 

1,031

Other income

 

11,555

 

17,371

 

27,793

 

33,763

Income before income taxes

 

1,819,680

 

628,742

 

3,260,228

 

878,384

 
Income tax expense

 

390,110

 

20,165

 

697,600

 

29,662

 
Net income

$

1,429,570

$

608,577

$

2,562,628

$

848,722

 
Net income per common share:
Basic

$

0.08

$

0.04

$

0.15

$

0.05

Diluted

$

0.08

$

0.04

$

0.15

$

0.05

 
Weighted average shares outstanding:
Basic

 

17,253,746

 

17,222,165

 

17,250,059

 

17,218,275

Diluted

 

17,253,746

 

17,223,998

 

17,250,059

 

17,220,143

 

Contacts

Relland Winand - CFO
610-646-0350

Contacts

Relland Winand - CFO
610-646-0350