Innovative Solutions & Support Acquires License for Honeywell’s Display Generator and Flight Control Computer Product Line, Strengthening Position in Military Market

Rhea-AI Summary

Innovative Solutions & Support, Inc. (NASDAQ: ISSC) has acquired the license for Honeywell's military Display Generators and Flight Control Computers product line. The deal includes an exclusive license to manufacture, upgrade, and repair the products, along with exclusive intellectual property rights and inventory transfer. This acquisition significantly expands IS&S's capabilities in the military aviation sector.

CEO Shahram Askarpour stated that this agreement builds on recent successful transactions with Honeywell and will enhance IS&S's brand growth and position in the global military aviation market. CFO Jeff DiGiovanni noted that the company has increased its bank credit facility with PNC Bank, maintaining a strong financial position to support ongoing operations and pursue growth objectives, including organic growth and strategic acquisitions.

Positive

• Exclusive license acquired for Honeywell's military Display Generators and Flight Control Computers
• Expansion of capabilities and enhanced presence in the military aviation sector
• Exclusive intellectual property rights and inventory transfer included in the deal
• Increased bank credit facility to support operations and growth objectives

Negative

• None.

Insights

Financial Analyst

This acquisition is a significant strategic move for IS&S, potentially boosting its revenue and market share in the military aviation sector. The exclusive licensing agreement for Honeywell's Display Generators and Flight Control Computers product line opens up new opportunities for manufacturing, upgrades and repairs. This diversification could lead to a more stable revenue stream and enhanced long-term growth prospects. The expanded credit facility from PNC Bank provides financial flexibility for future growth initiatives. However, investors should monitor the integration process and any potential short-term costs associated with the transition. The deal's impact on IS&S's financials, including revenue growth and profit margins, will be important to assess its success in the coming quarters.

Aerospace Industry Expert

This licensing agreement marks a significant shift in IS&S's market positioning within the military aviation sector. By acquiring rights to Honeywell's established product line, IS&S gains immediate access to a mature technology stack and an existing customer base. This move could accelerate IS&S's penetration into military programs and potentially lead to follow-on contracts for upgrades and support services. The transfer of intellectual property rights is particularly valuable, as it allows IS&S to innovate and develop next-generation products based on proven designs. However, the company will need to manage the transition carefully to maintain customer relationships and ensure seamless product support. The long-term success will depend on IS&S's ability to leverage this acquisition for further military market expansion and technological advancement.

EXTON, Pa.--(BUSINESS WIRE)-- Innovative Solutions & Support, Inc. ("IS&S" or the "Company") (NASDAQ: ISSC) today announced it acquired the license for various generations of military Display Generators and Flight Control Computers from Honeywell.

The deal includes an exclusive license to manufacture, upgrade, and repair the product line. The agreement also grants IS&S exclusive intellectual property rights and includes the transfer of existing inventory necessary for continued manufacturing and support of the products. This acquisition significantly expands IS&S’s capabilities and enhances its presence within the military aviation sector. Following a transition period, IS&S, will be responsible for the activities formerly performed by Honeywell.

Shahram Askarpour, Chief Executive Officer of IS&S, commented, “We are pleased to secure this exclusive licensing agreement from Honeywell, further building on our recent successful transactions with this important strategic partner. This latest transaction not only strengthens our position in the military aviation market, but also enables us to further gain operational efficiencies. We are confident this transaction will enhance our brand’s growth and further expand IS&S’s position in the global military aviation market.”

Jeff DiGiovanni, Chief Financial Officer of IS&S, “In connection with this transaction, we have increased the size of our bank credit facility, and we are appreciative of the confidence and continued support shown by our lender, PNC Bank. We maintain a strong financial position following the transaction, with our available liquidity under our expanded credit facility providing us the financial flexibility to both support our ongoing operations and continue the pursuit of our growth objectives, which includes investments in organic growth and additional strategic acquisitions.”

About Innovative Solutions & Support, Inc.

Headquartered in Exton, Pa., Innovative Solutions & Support, Inc. ( www.innovative-ss.com ) is a U.S.-based company specializing in the engineering, manufacturing, and supply of advanced avionic solutions. Its extensive global product reach and customer base span commercial and military markets, catering to both airframe manufacturers and aftermarket services for fixed-wing and rotorcraft applications. IS&S offers cutting-edge, cost-effective solutions while maintaining legacy product lines. The company is poised to leverage its experience to create growth opportunities in next-generation navigation systems, advanced flight deck and special mission displays, precise air data instrumentation, autothrottles, flight control computers, mission computers and software based situational awareness targeting autonomous flight. Supported by a robust portfolio of patents and the highest aircraft certification standards, IS&S is at the forefront of meeting the aerospace industry's demand for more sophisticated and technologically advanced products.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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, and the impact of the Honeywell asset acquisition and other acquisitions. 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 acquisitions, including the Honeywell asset acquisition, 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 December 31, 2023, 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.

Source: Innovative Solutions & Support, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241003927287/en/

IR Contact:

Jeffery DiGiovanni

+1 610.646.9800 x 550

jdigiovanni@innovative-ss.com



Paul Bartolai or Noel Ryan

ISSC@val-adv.com

Source: Innovative Solutions & Support, Inc.

FAQ

What product line did Innovative Solutions & Support (ISSC) acquire from Honeywell?

Innovative Solutions & Support acquired the license for Honeywell's military Display Generators and Flight Control Computers product line.

What rights does the licensing agreement grant to Innovative Solutions & Support (ISSC)?

The agreement grants IS&S an exclusive license to manufacture, upgrade, and repair the product line, along with exclusive intellectual property rights and inventory transfer.

How does this acquisition impact Innovative Solutions & Support's (ISSC) market position?

The acquisition significantly expands IS&S's capabilities and enhances its presence within the military aviation sector, strengthening its position in the global military aviation market.

What financial measures has Innovative Solutions & Support (ISSC) taken to support this acquisition?

IS&S has increased the size of its bank credit facility with PNC Bank to maintain a strong financial position and provide flexibility for ongoing operations and growth objectives.