Innovative Solutions & Support, Inc. Announces Third Quarter Fiscal 2022 Revenues and Earnings

Rhea-AI Summary

Innovative Solutions & Support, Inc. (NASDAQ: ISSC) reported third-quarter results ending June 30, 2022, with net sales of $6.9 million, a 12% increase from the previous year. Net income fell to $1.4 million ($0.08 per share) from $2.7 million ($0.16 per share) due to a prior tax benefit. Operating income rose 41% to $1.7 million. The firm added experienced board members and a new CFO. For the nine months, sales increased 26.6% to $20.5 million, with net income of $3.9 million ($0.23 per share).

Positive

• Net sales increased by 12% to $6.9 million in Q3 2022.
• Operating income rose by 41% to $1.7 million.
• Net income for the first nine months was $3.9 million, a slight increase from $3.5 million the previous year.
• Total sales increased by 26.6% to $20.5 million for the first nine months.
• Strong cash flow with $14.5 million in cash on hand.

Negative

• Net income decreased from $2.7 million to $1.4 million in Q3 2022 due to a lack of prior tax benefits.
• Earnings per share fell from $0.16 to $0.08 in Q3 2022.

EXTON, Pa.--(BUSINESS WIRE)-- Innovative Solutions & Support, Inc. ("IS&S" or the "Company") (NASDAQ: ISSC) today announced its financial results for the third quarter and first nine months of fiscal year 2022, ending June 30, 2022.

For the third quarter of fiscal 2022, the Company reported net sales of $6.9 million, up from 12% from $6.2 million reported for the third quarter of fiscal 2021. Net income for the third quarter of fiscal 2022 was $1.4 million, or $0.08 per share, compared to $2.7 million, or $0.16 per share, in the same quarter a year ago. Third quarter fiscal 2021 results include a $1.5 million, or $0.09 per share, tax benefit from the release of a deferred tax valuation allowance. The Company reported a 41% increase in operating income, rising to $1.7 million from $1.2 million a year ago.

Shahram Askarpour, Chief Executive Officer, said, "I am pleased to report another quarter of strong growth in revenue, operating income and cash flow.

Mr. Askarpour added, "I am also pleased to welcome two experienced aviation industry professionals to our Board, Ms. Parizad Olver (Parchi) and Mr. Stephen L. Belland. Both individuals strengthen our Board with their extensive experience in aviation finance and aerospace and defense, respectively. In addition, I want to also welcome Michael Linacre as Chief Financial Officer. Mike has an accomplished track record of successful financial management and driving financial results. He has recently joined IS&S as CFO upon the retirement of Relland Winand. I believe we have a leadership team that will continue to drive growth and create value for our shareholders.”

Cash Flow, New Orders and Backlog

The Company’s cash on hand increased to $14.5 million at June 30, 2022, from $8.3 million at the end the latest fiscal year end. Net cash provided by operating activities was $6.4 million for the first nine months of the year.

New orders in the third quarter of fiscal 2022 were approximately $12.0 million and backlog as of June 30, 2022, was $12.6 million, up from $7.5 million at March 31, 2022. Only purchase orders in hand from the Pilatus PC-24, Textron King Air and the KC-46A long-term programs are included in the backlog total. The Company expects these programs to remain in production for approximately a decade and believes that they will continue to add to production sales already included in the backlog.

Nine Months Results

Total sales for the nine months ended June 30, 2022 were $20.5 million, up 26.6% compared to $16.2 million for the nine months ended June 30, 2021. For the nine months ended June 30, 2022, the company reported net income of $3.9 million, or $0.23 per share, up from $3.5 million, or $0.21 per share for the first nine months of fiscal 2021. The company’s operating income of $4.9 million is up 138% from $2.0 million for the nine months a year ago

Conference Call

The Company will be hosting a conference call on Thursday, August 11, 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: 1-844-739-3798 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 & Support, Inc. Condensed Consolidated Statements of Operations
		Three Months Ended June 30,							Nine Months Ended June 30,
		2022			2021				2022			2021
Net Sales:
Product		$	6,935,976		$	5,981,462			$	20,279,371		$	15,886,967
Engineering development contracts			-			198,721				198,203			284,713
Total net sales			6,935,976			6,180,183				20,477,574			16,171,680
Cost of sales:
Product			2,879,462			2,764,765				8,253,981			7,270,708
Engineering development contracts			-			60,916				16,748			77,656
Total cost of sales			2,879,462			2,825,681				8,270,729			7,348,364
Gross profit			4,056,514			3,354,502				12,206,845			8,823,316
Operating expenses:
Research and development			676,381			646,795				2,062,937			1,936,747
Selling, general and administrative			1,694,233			1,512,138				5,226,015			4,847,410
Total operating expenses			2,370,614			2,158,933				7,288,952			6,784,157
Operating income			1,685,900			1,195,569				4,917,893			2,039,159
Interest income			10,429			107				10,871			1,138
Other income			21,608			17,231				49,401			50,994
Income before income taxes			1,717,937			1,212,907				4,978,165			2,091,291
Income tax expense			358,763			(1,473,014	)			1,056,363			(1,443,352	)
Net income		$	1,359,174		$	2,685,921			$	3,921,802		$	3,534,643
Net income per common share:
Basic		$	0.08		$	0.16			$	0.23		$	0.21
Diluted		$	0.08		$	0.16			$	0.23		$	0.21
Weighted average shares outstanding:
Basic			17,261,349			17,230,387				17,253,822			17,222,312
Diluted			17,265,798			17,231,438				17,255,305			17,223,908

Innovative Solutions and Support, Inc. Condensed Consolidated Balance Sheets
		June 30,				September 30,
			2022				2021
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	14,541,901			$	8,265,606
Accounts receivable			3,003,362				4,046,337
Inventories			4,905,034				4,545,392
Prepaid expenses and other current assets			778,850				833,076
Assets held for sale			1,558,475				-
Total current assets			24,787,622				17,690,411
Property and equipment, net			6,381,461				8,143,483
Deferred income taxes			278,085				1,063,822
Other assets			168,900				188,284
Total assets		$	31,616,068			$	27,086,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		$	752,479			$	623,620
Accrued expenses			1,683,430				1,431,115
Contract liability			329,116				417,504
Total current liabilities			2,765,025				2,472,239
Other liabilities			18,407				28,680
Total liabilities			2,783,432				2,500,919
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, 2022 and September 30, 2021			-				-
Common stock, $.001 par value: 75,000,000 shares authorized,
19,372,664 and 19,342,823 issued at June 30, 2022 and September 30, 2021			19,373				19,343
Additional paid-in capital			52,142,818				51,817,095
(Accumulated deficit)			(1,961,018	)			(5,882,820	)
Treasury stock, at cost, 2,096,451 shares at June 30, 2021
and September 30, 2021			(21,368,537	)			(21,368,537	)
Total shareholders' equity			28,832,636				24,585,081
Total liabilities and shareholders' equity		$	31,616,068			$	27,086,000

 

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Mike Linacre – CFO

610-646-9800 X550

Source: Innovative Solutions & Support, Inc.

FAQ

What were the financial results for ISSC in Q3 2022?

ISSC reported net sales of $6.9 million, a 12% increase, and net income of $1.4 million, or $0.08 per share.

How did ISSC perform in the first nine months of fiscal year 2022?

Total sales for the nine months reached $20.5 million, a 26.6% increase from the previous year, with a net income of $3.9 million.

What is the outlook for ISSC following the recent financial results?

ISSC's CEO expressed confidence in continued growth, highlighting strong cash flow and new order backlog.

What were the key highlights from the ISSC conference call?

ISSC discussed revenue growth, operational improvements, and the addition of experienced board members and a new CFO during the call.