Business Wire | May 12, 2021 04:30PM EDT

Innovative Solutions & Support, Inc. Announces Second Quarter Fiscal 2021 Financial Results

May 12, 2021

EXTON, Pa.--(BUSINESS WIRE)--May 12, 2021--Innovative Solutions & Support, Inc. ("IS&S" or the "Company") (NASDAQ: ISSC) today announced its financial results for the second quarter of fiscal 2021, ended March 31, 2021.

For the second quarter of fiscal 2021 the Company reported net sales of $5.1 million compared to $4.8 million in the second quarter a year ago. The Company reported net income of $0.6 million, or $0.04 per share, compared to $0.4 million or $0.03 per share, in the second quarter of fiscal 2020.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, "Over the past three months we grew revenues, generated positive cash flow and reported another profitable quarter, achieving the ongoing objectives that we believe increase the value of Innovative Solutions. Results in the second quarter were once again driven by our strategy to increasingly diversify our end markets, targeting both OEM production programs as well as retrofit opportunities in the commercial air transport, military, and general aviation markets. Sales of our ThrustSense(r) AutoThrottle continue to grow. The growing air cargo market is creating opportunities for our Boeing 757 and 767 Flat Panel Display Systems as evidenced by orders received from Amazon. Additionally, we have announced a new lower cost AutoThrottle that we believe enhances our offering in an expanding market. As the pandemic recedes, we remain confident that over the longer term the capabilities and price-for-performance characteristics of our technology will strengthen our brand globally."

Cash flow from operations was approximately $0.6 million for the quarter, so that at March 31, 2021, the Company had $6.0 million of cash on hand. Since September of 2020, nearly $20 million of cash has been distributed to our shareholders while remaining in excellent financial condition with significant liquidity and no debt.

New orders in the second quarter of fiscal 2021 were $7.6 million, and backlog as of March 31, 2021 was $6.7 million, an increase from $4.2 million at December 31, 2020. 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, 2021 were $10.0 million compared to $9.3 million for the six months ended March 31, 2020. For the six months ended March 31, 2021, the company reported net income of $0.8 million, or $0.05 per share, versus $0.8 million, or $0.04 per share for the first half of fiscal 2020 which included a $0.3 million tax benefit.

Conference Call

The Company will be hosting a conference call on Thursday, May 13, 2021, 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 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,

2021 2020

(unaudited)ASSETSCurrent assets Cash and cash equivalents $ 5,997,691 $ 12,603,967

Restricted cash - 11,180,900

Accounts receivable 2,847,567 4,369,111

Inventories 4,654,111 4,291,335

Prepaid expenses and other current assets 836,061 675,109

Total current assets 14,335,430 33,120,422

Property and equipment, net 8,286,005 8,175,872

Other assets 174,471 249,543

Total assets $ 22,795,906 $ 41,545,837

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 1,054,409 $ 790,892

Dividend payable - 11,180,900

Accrued expenses 1,259,010 1,361,960

Contract liability 92,072 313,365

Total current liabilities 2,405,491 13,647,117

Non-current deferred income taxes 129,689 129,689

Total liabilities 2,535,180 13,776,806

Commitments and contingencies Shareholders' equity Preferred stock, 10,000,000 shares authorized, $.001 par value, of which200,000 shares are authorized as Class A Convertible stock. No sharesissued and outstanding at March 31, 2021 $ - $ - and September 30, 2020 Common stock, $.001 par value: 75,000,000shares authorized, 19,338,323 and 19,310,835issued at March 31, 2021 and September 30, 19,338 19,311 2020, respectively Additional paid-in capital 51,708,925 51,458,787

(Accumulated deficit) (10,099,000 ) (2,340,530 )

Treasury stock, at cost, 2,096,451 shares at March 31, 2021 andSeptember 30, 2020 (21,368,537 ) (21,368,537 )

Total shareholders' equity 20,260,726 27,769,031

Total liabilities and shareholders' equity $ 22,795,906 $ 41,545,837

Innovative Solutions and Support, Inc.Consolidated Statements of Operations(unaudited)Three months endedSix months endedMarch 31,March 31,2021

2020

2021

2020

Net Sales5,121,845

4,835,065

9,991,497

9,346,493

Cost of sales2,218,854

2,539,894

4,522,683

4,449,675

Gross profit2,902,991

2,295,171

5,468,814

4,896,818

Operating expenses:Research and development689,654

712,019

1,289,952

1,378,634

Selling, general and administrative1,602,118

1,531,389

3,335,272

3,234,663

Total operating expenses2,291,772

2,243,408

4,625,224

4,613,297

Operating income611,219

51,763

843,590

283,521

Interest income152

65,721

1,031

144,591

Other income17,371

11,219

33,763

28,499

Income before income taxes628,742

128,703

878,384

456,611

Income tax expense (benefit)20,165

(309,402

)

29,662

(309,402

)

Net income$

608,577

$

438,105

$

848,722

$

766,013

Net income per common share:Basic$

0.04

$

0.03

$

0.05

$

0.05

Diluted$

0.04

$

0.03

$

0.05

$

0.04

Weighted average shares outstanding:Basic17,222,165

16,931,138

17,218,275

16,920,087

Diluted17,223,998

17,123,388

17,220,143

17,102,483

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CONTACT: Relland Winand, Chief Financial Officer Innovative Solutions & Support, Inc. 610-646-0350