Business Wire | Aug 11, 2021 04:30PM EDT

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

Aug. 11, 2021

EXTON, Pa.--(BUSINESS WIRE)--Aug. 11, 2021--Innovative Solutions & Support, Inc. ("IS&S" or the "Company") (NASDAQ: ISSC) today announced its financial results for the third quarter of fiscal 2021, ended June 30, 2021.

For the third quarter of fiscal 2021, the Company reported net sales of $6.2 million up 3% from the third quarter a year ago. The Company reported net income of $2.7 million, or $0.16 per share, which includes a $1.5 million tax benefit from the release of the deferred tax valuation allowance, up 108% from the third quarter of fiscal 2020.

Geoffrey Hedrick, Chairman and Chief Executive Officer of IS&S, said, "Revenues in the quarter were up both year-over-year, as well as sequentially from the second quarter of this year, as momentum builds. This growth was achieved during difficult times with the ongoing pandemic which is most encouraging and bodes well for the Company's future."

"We continue to expand in a number of our key markets. In air cargo conversions, demand remains robust for our Boeing 757 and 767 Flat Panel Display Systems, particularly from a premier on-line retailer, contributing to both our solid third quarter performance and growth in our backlog. OEM activity was also strong during the quarter, with an increase in the pace of autothrottle deliveries to Textron for the King Air. In fact, the August 2021 issue of Flying Magazine reviewed the King Air 360 and made it a point to feature our autothrottle with positive reviews. Flying Magazine called it 'surely the star of the King Air 360' from a pilot's perspective, while Textron's 360 technical marketing advisor and sales engineer called our autothrottle an 'elegant little engineering solution.' I'm pleased this highly respected aviation publication has validated the effort we have put into this groundbreaking control and safety solution for single-pilot aircraft. We look forward to building on our growing foundation of both retrofit and OEM programs as our strategy to create additional value for our shareholders."

The Company's cash on hand increased to $7.5 million on June 30, 2021, with net cash flows from operating activities of $1.5 million in the third quarter. Since September of 2020, nearly $20 million of cash has been distributed to shareholders while the Company remains in a strong financial position with significant liquidity and no debt.

New orders in the third quarter of fiscal 2021 were approximately $9.0 million and backlog as of June 30, 2021 increased 40% to $9.5 million, up from $6.7 million at March 31, 2021. New orders for the nine- month period ended June 30, 2021 were approximately $22.0 million. 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 approximately a decade. The Company expects that these contracts will add to production sales already in backlog.

Nine Months Results

Total sales for the nine months ended June 30, 2021 were $16.2 million up 6% from the nine months ended June 30, 2020. Net income for the nine months ended June 30, 2021 was $3.5 million, or $0.21 per share, up 75% from the first nine months of fiscal 2020. Net income in the first nine months of fiscal 2021 included $1.4 million of tax benefits, primarily those recognized in the third quarter as noted above.

Conference Call

The Company will be hosting a conference call on Thursday, August 12, 2021, at 11:00 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

June 30, September 30,

2021 2020

(unaudited)

ASSETSCurrent assetsCash and cash equivalents $ 7,482,863 $ 12,603,967

Restricted cash - 11,180,900

Accounts receivable 4,293,727 4,369,111

Inventories 4,838,811 4,291,335

Prepaid expenses and other current assets 697,329 675,109

Total current assets 17,312,730 33,120,422

Property and equipment, net 8,220,942 8,175,872

Deferred income taxes 1,331,928 -

Other assets 151,364 249,543

Total assets $ 27,016,964 $ 41,545,837

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilitiesAccounts payable $ 936,042 $ 790,892

Dividend payable - 11,180,900

Accrued expenses 1,543,487 1,361,960

Contract liability 1,528,694 313,365

Total current liabilities 4,008,223 13,647,117

Non-current deferred income taxes - 129,689

Total liabilities 4,008,223 13,776,806

Commitments and contingencies Shareholders' equity Preferred stock, 10,000,000 sharesauthorized, $.001 par value, of which200,000 shares are authorized as Class AConvertible stock. No sharesissued and outstanding at June 30, 2021 and $ - $ - September 30, 2020 Common stock, $.001 par value: 75,000,000shares authorized, 19,342,823 and 19,310,835issued at June 30, 2021 and September 30, 19,343 19,311 2020, respectively Additional paid-in capital 51,771,014 51,458,787

(Accumulated deficit) (7,413,079 ) (2,340,530 )

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

Total shareholders' equity 23,008,741 27,769,031

Total liabilities and shareholders' equity $ 27,016,964 $ 41,545,837

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

Nine months ended

June 30,

June 30,

2021

2020

2021

2020

Net Sales6,180,183

5,953,689

16,171,680

15,300,182

Cost of sales2,825,681

2,559,016

7,348,364

7,008,691

Gross profit3,354,502

3,394,673

8,823,316

8,291,491

Operating expenses:Research and development646,795

870,805

1,936,747

2,249,439

Selling, general and administrative1,512,138

1,279,422

4,847,410

4,514,085

Total operating expenses2,158,933

2,150,227

6,784,157

6,763,524

Operating income1,195,569

1,244,446

2,039,159

1,527,967

Interest income107

7,767

1,138

152,358

Other income17,231

16,261

50,994

44,760

Income before income taxes1,212,907

1,268,474

2,091,291

1,725,085

Income tax (benefit) expense(1,473,014

)

8,616

(1,443,352

)

(300,786

)

Net income$

2,685,921

$

1,259,858

$

3,534,643

$

2,025,871

Net income per common share:Basic$

0.16

$

0.07

$

0.21

$

0.12

Diluted$

0.16

$

0.07

$

0.21

$

0.12

Weighted average shares outstanding:Basic17,230,387

16,952,973

17,222,312

16,931,049

Diluted17,231,438

17,087,275

17,223,908

17,097,414

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